Browsing by Subject "Output gap"

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    Employing the extended Kalman filter in measuring the output gap
    (Elsevier BV, 2005) Ozbek, L.; Ozlale, U.
    The paper has two parts. In the first part, the output gap and potential output series for the Turkish economy are derived within the context of a non-linear state space model, where the extended Kalman filter emerges as the estimation methodology. Such a methodology allows for time-varying parameters to decompose output into trend and cyclical components. The results imply that both the parameters in the model and the derived series are fairly reasonable and consistent with the path that the Turkish economy followed in the last fifteen years. In the second part, the relation between inflation and the output gap is analyzed. It is found that inflation and the output gap are not positively associated, contradicting studies that view demand side forces as the primary determinants of inflation in Turkey. © 2004 Elsevier B.V. All rights reserved.
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    Sources of growth and the output gap for the Turkish economy
    (Emerald Group Publishing, 2006) Özcan, Kıvılcım M.; Özlale, Ümit; Sarıkaya, Ç.; Nugent, J. B.; Pesaran, M. H.
    In this study, we analyze the growth dynamics of the Turkish economy. After investigating the sources of growth and comparing both the output and the inflation performance with the other MENA countries, we find that the Turkish economy has not achieved a sustainable growth path and has a much worse inflation performance. Then, we take a closer look at the volatile output performance and discuss the role of the wrong macroeconomic policies on the unsustainable output performance. Utilizing an output gap measure, we find that the short-term capital flows seem to be the main driving force in generating excessive fluctuations in the output. Based on these findings, we can say that the high economic growth rates, which the Turkish economy has achieved in the recent years owe much to massive short-term capital inflows. At this stage, it is too early to evaluate the effects of the recent structural reforms on the long-term output dynamics.