Ugur Soytas

Energy consumption and GDP: causality relationship in G-7 countries and emerging markets

The causality relationship between energy consumption and income is a well-studied topic in energy economics. This paper studies the time series properties of energy consumption and GDP and reexamines the causality relationship between the two series in the top 10 emerging markets--excluding China due to lack of data--and G-7 countries. We discover bi-directional causality in Argentina, causality running from GDP to energy consumption in Italy and Korea, and from energy consumption to GDP in Turkey, France, Germany and Japan. Hence, energy conservation may harm economic growth in the last four countries.

Income and Education in Turkey: A Multivariate Analysis

Abstract Although the role of education in an economy is emphasized in theoretical studies, empirical literature finds mixed results for the relationship between growth and education. We examine the relationship between Gross Domestic Product (GDP) and enrollments in primary, secondary, and high schools, as well as universities in Turkey for 1937–1996, in a multivariate framework. We find that real GDP and educational variables are cointegrated. We also discover different directions of Granger causality between different levels of education and GDP. The generalized forecast error variance decomposition and impulse response analyses seem to confirm the importance of school enrollments in explaining growth.

Economic growth and financial development in Turkey: new evidence

We examine the link between financial development and economic growth in Turkey for the period 1991 to 2005 using quarterly data. We use relatively new time series techniques that are less prone to bias to examine this relationship. We also construct a comprehensive financial development index using principal component analysis. When we control for the possible effects of inflation and monetary and fiscal policies on monetary aggregates and the economic growth rate, we fail to find any long-run causality in either direction. The result is also confirmed by generalized impulse response analysis.

Do Global Risk Perceptions Play a Role in Emerging Market Equity Return Volatilities

This paper investigates whether global risk perceptions lead emerging market return volatilities. In so doing, we analyzed the period of interest in three parts to determine the effects of the changes in global risk perceptions on the volatility of emerging markets. We uncovered volatility spillover from risk perceptions to the MXEF returns before the crisis. Our results show that all the effects on emerging market volatilities are severed in 2008, during which MXEF follows a downward trend. However, we observe that volatility transmission emerges during the recovery period of MXEF again. Hence, risk perceptions should be considered while analyzing emerging markets.

The Relationship Between Energy Commodity Prices and Electricity and Market Index Performances: Evidence from an Emerging Market

ABSTRACT We investigate the effect of energy commodity price movements on market and electricity index returns in Turkey for the periods before, during, and after the year 2008. Although the Turkish economy is highly reliant on oil, we find that oil price does not lead either electricity or market indexes. This might be attributable to sluggish integration of financial markets in Turkey compared to developed markets. Natural gas price leads electricity index in the pre-2008 period. Its significance is reduced following the decline in natural gas usage in electricity production. This suggests that commodity dependence may be driving the link between commodity and asset prices in related sectors.

Are There Any Diversification Benefits Among Global Finance Center Candidates in Eurasia

ABSTRACT Several Eurasian markets are considered as potential global financial centers. The main objective of this article is to evaluate the two strong candidates, Russia and Turkey, based on short- and long-run diversification benefits they provide to global investors along with big four global finance centers (US, UK, Hong Kong, Singapore) in the world. To that respect, we investigate both price spillover and volatility spillover effects among global finance centers and the two strong Eurasian candidates. Our results suggest that Istanbul Stock Exchange (ISE) has more diversification benefits and is more resilient to risk transfers from other markets compared to Moskow Stock Exchange (MSE).

Energy mutual funds and oil prices

Purpose - The purpose of this paper is to examine the price level and volatility impacts of oil prices on energy mutual funds (EMFs). The authors also examine specific fund characteristics which might influence those interactions. Design/methodology/approach - The authors test for volatility transmission between the oil prices and the funds in the sample. Later, the authors test to see which fund characteristics impact these volatility interactions. Findings - The results show oil price movements lead majority of sample EMFs. The authors also find a volatility feedback relationship with most of the sample. Furthermore, the authors show the fund characteristics to be important indicators of these interactions. Morningstar rating, market capitalization and management tenure are found to be significant drivers of the relationships between EMFs and oil prices. Originality/value - To the knowledge, there is not a study in literature which examines these relationships.

The Impact of Information Provision on the Social Acceptance of Shale Gas Development: A Review-Based Inclusive Model

Social acceptance is critical to the market penetration of new products and technologies as well as the successful implementation of policies, including those concerning energy demand. The hydraulic fracturing technique employed in the development of shale gas has been followed by controversy and this has resulted in the emergence of heterogeneity in attitudes towards the process. This review-based perspective surveys selected contributions of psychology to the literature on social acceptance. While not comprehensive, it aims to identify the factors that determine the acceptance of shale gas development. The proposed model for understanding acceptance encompasses the factors: perceived benefits, risks and costs, procedural and distributional fairness, trust, outcome efficacy, problem perception, knowledge and experience. The study then discusses adequate means of modulating distinguished responses to the same impulse and proposes information provision as an effective methodology. This has become a viable option because survey data and numerous opinion polls have underlined the deficiency of knowledge and the lack of a clear understanding of the risks associated with and benefits to be derived from shale gas development. Moreover, unlike experience, that is much more difficult to regulate, knowledge provides us with three channels namely the source, content and means of communication that allow for spatial divergences in policymaking.

Assessing the Value of the (New) Turkish Lira

Observing that the Turkish Lira has appreciated against the US Dollar in the recent years in spite of the higher inflation rate in Turkey brings a question about the applicability of PPP to Turkish case. We provide Turkish Balance of Payments, an indicator of funds flow, as an explanatory factor for the changes in the YTL/USD exchange rate. Both models used, with Balance of Payments and without, reveals that PPP does not hold between Turkey and the US for the time period examined.

The Temporal Link between Financial Development and Economic Growth: The Case of Russian Federation

We re-examine the link between financial development and economic growth in Russian Federation for the period 1994-2005. We use relatively new time series techniques to examine this relationship. When we control for the possible effects of monetary and fiscal policies on monetary aggregates and the economic growth rate, we find that there is a uni-directional causality running from financial depth to economic growth. However, the size of domestic credits outstanding relative to the size of the economy does not seem to be Granger causing economic growth or vice versa. Hence, our results do not support most of the studies in the literature that find bi-directional causality. This may be the result of controlling for government policies or the unique features and experiences of the Russian economy