Two essays in macroeconomics

The first chapter of this study assesses the effects of real depreciation on the economic performance of Turkey by considering quarterly data from 1987:I to 2001:III. The empirical evidence suggests that the real depreciations are contractionary even when the external factors such as world interest rates, and capital flows are controlled. Moreover, the results obtained from the analyses indicate that real exchange rate depreciations are inflationary. In the second part of the study, it is aimed to examine the effects of the average maturity of the domestic debt stock on economic performance in Turkey by considering monthly data from 1986:5 to 2001:5. It is found that an increase in the average maturity decreases output temporarily and the price level permanently. Moreover, an increase in the average maturity appreciates the currency. These findings show that an increase in maturity mimics a tightening in the monetary policy. However, it is also observed that an increase in maturity leads to a decline in interest rates.