Browsing by Author "Kutan, A. M."
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Item Open Access Corruption and economic development in energy-rich economies(Palgrave Macmillan Ltd., 2009) Kalyuzhnova, Y.; Kutan, A. M.; Yiğit, TanerWe empirically model the causes of corruption and test the economic development-corruption link in energy-rich economies, using data from 48 countries with energy resources. The results indicate that energy abundance may not necessarily hurt economic development in energy-rich countries, allowing enterprises to conduct business more effectively to reduce corruption, establishing a better political (democratic) regime improves corruption rankings, and finally while corruption reduces both the level of GDP per capita and its growth rate, economic development decreases corruption.Item Open Access The effects of transition and political instability on foreign direct investment inflows: Central Europe and the Balkans(Wiley-Blackwell Publishing Ltd., 2006) Brada, J. C.; Kutan, A. M.; Yigit, T. M.This paper examines the effects of transition and of political instability on foreign direct investment (FDI) flows to the transition economies of Central Europe, the Baltics and the Balkans. We find that FDI flows to transition economies unaffected by conflict and political instability exceed those that would be expected for comparable West European countries. Success with stabilization and reform increased the volume of FDI inflows. In the case of Balkan counties, conflict and instability reduced FDI inflows below what one would expect for comparable West European countries, and reform and stabilization failures further reduced FDI to the region. Thus, we find that the economic costs of instability in the Balkans in terms of foregone FDI have been quite high. © 2006 The Authors Journal compilation © 2006 The European Bank for Reconstruction and Development.Item Open Access European integration, productivity growth and real convergence(Elsevier BV, 2007) Kutan, A. M.; Yigit, T. M.This paper derives a stochastic endogenous growth model to investigate the impact of European Union (EU) integration on convergence and productivity growth. The theoretical model implies both temporary and permanent positive effects of the integration process. The empirical part of the analysis uses structural break tests and data envelopment analysis to examine the accession process of five recent members to the EU15. The results show (i) endogenously identified accession dates as structural breaks, (ii) improved rates of productivity growth after accession over and above the Union benchmark level, and (iii) increased pace of overall growth due to capital accumulation as a result of institutional features of the Union such as Structural and Cohesion Funds. These findings support the theoretical model, implying that economic integration is beneficial for member countries, especially from a long-run perspective, and Cohesion and Structural funds help the new members catch up with the core-EU members' standard of living. (c) 2006 Elsevier B.V. All rights reserved.Item Open Access European integration, productivity growth and real convergence: evidence from the new member states(Elsevier BV, 2009) Kutan, A. M.; Yigit, T. M.We estimate the determinants of labor productivity growth in 8 new European Union (EU) member states that joined the Union in 2004. Our focus is on the impact of globalization and EU integration efforts on labor productivity growth. Previous studies test the impact of trade using either exports or trade openness. We also test the impact of imports separately on labor productivity growth. Using panel data for 1995-2006 period, we find that globalization has mixed effects. FDI and exports improve productivity, but imports hurt it. Regarding domestic variables, we find that human capital is the most important source of labor productivity growth in the new member states. There is also considerable adjustment of labor productivity towards EU15 levels, indicating significant "catching up" and hence real convergence. Policy implications of the findings are also discussed. © 2009 Elsevier B.V. All rights reserved.Item Open Access Fiscal convergence in the European Union(Elsevier BV, 2008) Kocenda, E.; Kutan, A. M.; Yigit, T. M.We empirically examine the fiscal convergence of the recent ten European Union (EU) members using the Maastricht fiscal convergence criteria. We test for absolute beta and sigma convergence of the new members in comparison to the Maastricht benchmarks, as well as the EU15 figures, using methodologies that allow for structural breaks. The results show poor fiscal performance in the European Union in general, suggesting that monetary unions do not necessarily encourage fiscal convergence for its members. © 2008 Elsevier Inc. All rights reserved.Item Open Access Nominal and real stochastic convergence of transition economies(Academic Press, 2004) Kutan, A. M.; Yigit, T. M.To investigate the sensitivity of real and nominal economic convergence of transition economies to model specification and restrictions, we extend the work of Kocenda [J. Compar. Econ. 29 (2001) 1] by considering a more stable, post-1993 period and by adopting a more recent panel estimation approach. This new technique involves less restrictive assumptions than previous panel unit root techniques by allowing heterogeneity in convergence rates. Our results show less nominal and real economic convergence than those of Kocenda.Item Open Access Pilgrims to the Eurozone: how far, how fast?(Elsevier BV, 2006) Kocenda, E.; Kutan, A. M.; Yigit, T. M.In our analysis, we re-examine the nominal and real convergence of all recent 10 European Union (EU) members to EU standards. Testing for monetary convergence has significant implications for interim optimal exchange rate and monetary policies before a formal and permanent link to the euro, while real convergence is the ultimate objective of economic integration. Novel features of the paper include broader measures of real convergence in both euro as well as local currencies, an examination of inflation and interest rate convergence with respect to the Maastricht benchmarks, and employment of more appropriate tests of convergence allowing for structural breaks. The results indicate slow but steady per-capita real income convergence towards EU standards. On the other hand, evidence indicates significant strong inflation and interest rate convergence. Policy implications of the paper are also discussed. © 2006 Elsevier B.V. All rights reserved.Item Open Access Real and nominal stochastic convergence: are the new EU members ready to join the Euro zone?(Academic Press, 2005) Kutan, A. M.; Yigit, T. M.A key requirement for the new members to join the European Economic and Monetary Union (EMU) is real and financial convergence to European Union (EU) levels. This paper expands the analysis in [Kocenda, E., Macroeconomic convergence in transition economies, Journal of Comparative Economics 29 (2001) 1-23] and [Kutan, A., Yigit, T., Nominal and real stochastic convergence of transition economies, Journal of Comparative Economics 32 (2004) 23-36] by investigating the convergence of the new EU members to these standards. Using panel unit root techniques, we find strong evidence of real stochastic convergence for all new members, which indicates that they adjust to Euro-area output shocks. However, the degree of nominal convergence is idiosyncratic. The Baltic states exhibit the strongest monetary policy and price-level convergence, suggesting that they are ready to adopt the Euro. However, Central and East European countries should address the reasons for their lack of convergence before adopting the Euro. (c) 2005 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.Item Open Access The stock market channel of monetary policy in emerging markets: evidence from the Istanbul Stock Exchange(2007) Berument, Hakan; Kutan, A. M.Studies on the existence of the stock market channel of monetary policy in emerging markets are scant. We examine the impact of monetary policy on stock returns in Turkey's emerging economy during the post-1980 liberalization period. Evidence indicates that monetary policy affects returns with the strongest influence on the Financial and Services sectors. However, the impact is short lived, ranging between 9 and 24 months, depending upon the index used, suggesting that monetary policy is neutral. Overall, the results indicate that asset prices may provide an additional channel through which monetary policy affects short-run economic activity and hence business cycles. Given the increasing role of the stock market in emerging economies and the greater globalization of financial markets in general, central banks in these countries are well advised to pay close attention to the impact of stock market developments on economic activity, besides their traditional focus on the bond and foreign exchange markets.