Browsing by Subject "Financial crises--Turkey."

Now showing 1 - 3 of 3

Open Access
An Analysis on compositional effect during the great trade collapse
(2014) Bağırgan, Onursal
This thesis focuses on one of the famous hypotheses on The Great Trade Collapse which is compositional effect hypothesis. It includes three different parts. The first part examines the method of Levchenko, Lewis, Tesar (2010) for testing compositional effect, attempts to reproduce the results and conducts some robustness analysis of their results. The second part suggests some modifications on the existing model and applies the newly modified model to the US data. The findings suggest that compositional effect is an important factor of the US trade collapse during the The Great Recession. In the last part, the new model is applied to Turkey and the findings show that the compositional effect is not a significant factor of the trade reduction in Turkey. This result could be an indicator which shows that trade of the emerging countries are not governed by the same factors that drive developed country trade falls during the recent economic crisis.
Open Access
Finance growth nexus following the 2001 crisis in Turkey
(2012) Songül, Hüseyin
Diverse economic growth rates of countries have engaged the attention of economists. Recently, researchers have studied the role of financial development to explain the cross-country differences in growth. In particular, the direction of causality between financial sector development and economic growth has been analyzed in the context of two conflicting hypotheses. According to supply-leading hypothesis financial development leads to economic growth, however demandfollowing hypothesis claims that the direction of the relationship runs from economic growth to financial development. Beside these two competing hypotheses, bi-causality between economic growth and financial development has been argued in the literature as well. This paper examines the causal relationship between financial development and economic growth in Turkey for the period 2002:1-2011:2, using the technique of Granger causality. Our model reveals that there is a bidirectional long run relationship between the economic growth and banking sector development. On the other hand, the long run causality between the stock market development and economic growth is from stock market development to economic growth.
Open Access
Implications of global financial crisis on inflation targetting framework
(2012) Yağcıbaşı, Özge Filiz
Aside from its devastating effects on global economy, global financial crisis has also shaken the mainstream economic theory. After the crisis, policies implemented by governments and Central Banks, issues of financial stability, impacts of international capital flows and exchange rates have become the center of macroeconomic research. This thesis examines the impact of global financial crisis on the IT framework. The aim is to discuss the imperfections and defections in the framework and propose extensions. In this context, a small open economy DSGE model, calibrated for Turkey during 2003- 2012 is proposed. The base model is extended to capture dynamics of Turkish economy better. Since, trade and credit channels of transmission mechanism of crisis are the most powerful channels for the contagion of the crisis to Turkish economy, inclusion of net international investment position (to the problems of households and entrepreneurs) and imported capital good (to the production function) strengthen the explanatory power of the model considerably. Moreover, to address whether allowing Central Bank to respond exchange rates yields gains in terms of output and inflation stabilization, an augmented Taylor rule which incorporates exchange rates is constructed. Responses under the benchmark model where Central Bank uses a traditional Taylor rule and an augmented Taylor rule are obtained. To provide a reference in interpreting the findings of the model, a Vector Auto Regression analysis is performed with interest rates, inflation, output level and exchange rates as endogenous variables. Finally, results of the model experiments and VAR are compared. The results indicate that, the model with the augmented Taylor rule can help to smooth business cycle fluctuations more effectively than conventional Taylor rule but, in some cases, Central Bank may encounter with a tradeoff between output gap and inflation.