Lütfi Erden

The Effects of Public Investment on Private Investment in Developing Economies

The literature on the impact of public investment in developing economies gives inconsistent results on whether it complements or crowds out private investment. Applying several pooled specifications of a standard investment model to a panel of developing economies for 1980 to 1997, this study finds that public investment complements private investment, and that, on average, a 10 percent increase in public investment is associated with a 2 percent increase in private investment. The results also indicate that private investment is constrained by the availability of bank credit in developing economies. The same empirical models are run on a panel of developed economies. In contrast to developing economies, public investment crowds out private investment in developed economies. The results show that in a number of important ways, private investment in developed economies is influenced by different factors than private investment in developing economies.

A fuzzy analysis of country-size argument for the Feldstein-Horioka puzzle

This study aims to analyze the effect of country size, represented by relative Gross National Products (GNP), on the association between domestic investment and saving, using data from a panel of 21 OECD countries. The countries are clustered into four groups with respect to their relative country sizes with an application of Fuzzy c-Means clustering technique. The novelty of this approach is that it is an unsupervised method that generates membership values between zero and one instead of binary values that take values of zero or one only. In addition to this it has the advantages of its tolerance to imprecise data and the ease of understanding. The results show that the saving retention coefficients are greater for larger countries except for the cluster which contains the largest country. Thus, this work presents only partial evidence that the country size affects the relationship of domestic saving and investment.

Bilateral trade effects of fiscal devaluation: Evidence from OECD countries

ABSTRACT This paper empirically examines the effects of a fiscal devaluation on bilateral trade. To this end, employers’ social contribution (ESC) and value-added tax (VAT), which stand as the factors that represent typical fiscal devaluation, are embodied within the framework of a gravity model. Fixed effects vector decomposition (FEVD) technique is applied to the empirical models specified within this framework, employing panel data from 22 OECD countries over the 1980–2014 periods. The findings show that the effectiveness of the fiscal devaluation policy seems to alter with respect to how ESC and VAT are measured. Considering the fiscal devaluation policy implemented unilaterally, the policy turns out to be effective in nine countries in the sample.

YABANCI YARDIMLAR VE MALİ TEPKİ MODELİ: TÜRKİYE İÇİN BİR UYGULAMA

Bu calismanin amaci, yabanci yardimlarin kamu maliyesi degiskenleri uzerindeki etkilerini mali tepki modeli araciligiyla incelemektir. Yabanci yardimlarin icsel degisken oldugu varsayimi altinda gelir ve harcama kararlarini nasil etkiledigi 1975-2004 donemini kapsayan zaman serisi verileri ile Turkiye icin test edilmistir. Calismadan elde edilen baslica so-nuclar: (i) kamu gelirlerinin, yabanci yardimlarin ve borclanmanin oldukca onemli bir kismi Turkiye’de kamu tuketim harcamalarinin finansmani icin kullanilmaktadir. (ii) yabanci yardimlar, kamu yatirim harcamalari ve borclanma uzerinde pozitif etki yaratirken, kamu tuketim harcamalari ve kamu gelirleri uzerinde negatif etki yaratmaktadir. (iii) Yabanci yardim taahhutlerindeki degismeler genel toplamda kamu harcamalarini onemsiz olcude arttirirken, kamu gelirlerini hissedilir olcude azaltmaktadir.