Kivilcim Metin-Ozcan

Dynamics of Macroeconomic Adjustment in a Globalized Developing Economy: Growth, Accumulation and Distribution, Turkey 1969-1998

ABSTRACT Our purpose in this paper is to establish stylized facts of the Turkish macroeconomic adjustments using data from 1969 to 1999. We adopt a traditional a priori definition of business cycles as cyclical co-movements of economic variables such as public, private and construction investments, trade balance, labour productivity, wages and fiscal accounts with the cyclical component of real GDP. We also incorporate in our analysis an investigation of the cyclical components of exchange rates, interest rates, price inflation, and the monetary aggregates. Our quantitative findings reveal a robust and significant positive relationship between public and private investments and real GDP growth, suggesting the presence of “crowding in” effects of public investment. Trend growth of manufacturing wages and average labour productivity are loosely associated over the whole period, and the rapid gains in productivity in the post-1980 reform era are not observed to be materialized as gains in remunerations of wage labour. We also find a significant negative correlation of manufacturing wages with merchandise exports and the exchange rate; and document further evidence of the strong negative correlation between variations in consumer prices and production.

The role of macroeconomic instability in public and private capital accumulation and growth: the case of Turkey 1963-1999

This study investigates the empirical relationship(s) between macroeconomic instability, public and private capital accumulation and growth in Turkey over the period 1963–1999. Time series econometric techniques, such as cointegration and impulse response analysis, are used. The results of this paper suggest that the chronic and increasing macroeconomic instability of the Turkish economy has seriously affected her capital formation and growth. Furthermore, the Turkish experience indicates that chronic macroeconomic instability seems to be a serious impediment to public investment, especially to its infrastructural component, and shatters, or even reverses, the complementarity between public and private investment in the long run.

Productivity and Growth in an Unstable Emerging Market Economy: The Case of Turkey, 1960-2004

This paper explores sources of growth in the Turkish economy by performing growth accounting exercises over the 1960-2004 period and relevant subperiods. It also analyzes the role of a number of important policy-related factors, such as infrastructure investment, macroeconomic instability, and imports, on total factor productivity (TFP) by performing cointegration and impulse response analyses. The results suggest that both TFP and capital accumulation were crucial sources of growth during the sample period. Nevertheless, TFP growth displayed enormous variation from 1960 to 2004. The descriptive and empirical evidence suggests that TFP is positively affected by imports and public infrastructure investment and negatively affected by macroeconomic instability.

Macroeconomic Instability, Capital Accumulation and Growth: The Case of Turkey 1963-1999

This study investigates the empirical relationships between macroeconomic instability, capital accumulation and growth in Turkey over the period 1963-1999. We use recent time series econometric techniques, such as cointegration and impulse response analysis, to analyze empirical relationships between the variables of interest. The results of this paper suggest that the chronic and increasing macroeconomic instability of the Turkish economy has seriously affected her capital formation and hence her growth. Furthermore, chronic macroeconomic instability seems to become a serious impediment to the public investment, especially, its infrastructure component, and shattered or, even reversed the complementarity between public and private investment in the long-run. Therefore, Turkish experience has shown that macroeconomic instability not only deteriorates economic growth but it could also reverse the complementarity between public and private investment in the long-run.

Real wages, profit margins and inflation in Turkish manufacturing under post-liberalization

This article reports investigations into the behaviour of gross profit margins (mark-ups) in Turkish manufacturing industries for the post-1980 liberalization period in relation to price inflation, trade liberalization (openness) and real wage costs. Panel data econometrics over 29 subsectors of Turkish manufacturing are used over the period 1980–1996. Results suggest that profit margins are positively and significantly related both to price inflation and real wage costs. However, openness is found to have very little impact on profit margins.