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Author: Özcan Karahan
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Purpose: This study aims to examine the sustainability of the current account deficit in Turkey for the quarterly data between 2003 and 2018. Besides, some policy implications are made to ensure the sustainability of the current account deficit in Turkey's economy. Design/methodology/approach: The dynamics related to the sustainability of the current account deficit is analysed within the framework of the "intertemporal budget constraint approach" developed by Husted (1992). The long-term dynamics are empirically investigated using the Johansen cointegration test. Econometric analysis is also expanded within the framework of the Vector Error Model to reveal the short-term dynamics. Findings: The results of Johansen cointegration analysis suggest that current account income and expenses are integrated with the cointegrating coefficient less than 1, implying that Turkey has a weak form of current account deficit sustainability. Findings of the Vector Error Correction model confirm the results of long-run analysis and indicates that the deviations from the long-term equilibrium are corrected at a rate of 78% every quarter term. Research limitations/implications: The "intertemporal budget constraint approach" developed by Husted (1992) focuses on the equilibrium between current account income and expenses to analyse the sustainability of the foreign balance. However, the sustainability of the foreign deficit is also closely related to what kind of capital inflows is used to finance the foreign deficit. Therefore, the implications made regarding the sustainability of the current account deficit in Turkey based on the Husted model should be accepted with some reservations. Originality/value: Since external imbalances are a key challenge for most of the developing countries to provide full integration into the world economy, many empirical studies are examining the current account sustainability. The majority of these studies focus on the long-run dynamics of the current account imbalances. Unlike most of the previous studies, this paper also focuses on the short-run dynamics of the current account balance. Thus, the difference of this study from other studies stems from the examination of the dynamics of current account sustainability not only in the long term but also in the short term.
Author: Özcan Karahan
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Purpose: This study aims to examine the sustainability of the current account deficit in Turkey for the quarterly data between 2003 and 2018. Besides, some policy implications are made to ensure the sustainability of the current account deficit in Turkey's economy. Design/methodology/approach: The dynamics related to the sustainability of the current account deficit is analysed within the framework of the "intertemporal budget constraint approach" developed by Husted (1992). The long-term dynamics are empirically investigated using the Johansen cointegration test. Econometric analysis is also expanded within the framework of the Vector Error Model to reveal the short-term dynamics. Findings: The results of Johansen cointegration analysis suggest that current account income and expenses are integrated with the cointegrating coefficient less than 1, implying that Turkey has a weak form of current account deficit sustainability. Findings of the Vector Error Correction model confirm the results of long-run analysis and indicates that the deviations from the long-term equilibrium are corrected at a rate of 78% every quarter term. Research limitations/implications: The "intertemporal budget constraint approach" developed by Husted (1992) focuses on the equilibrium between current account income and expenses to analyse the sustainability of the foreign balance. However, the sustainability of the foreign deficit is also closely related to what kind of capital inflows is used to finance the foreign deficit. Therefore, the implications made regarding the sustainability of the current account deficit in Turkey based on the Husted model should be accepted with some reservations. Originality/value: Since external imbalances are a key challenge for most of the developing countries to provide full integration into the world economy, many empirical studies are examining the current account sustainability. The majority of these studies focus on the long-run dynamics of the current account imbalances. Unlike most of the previous studies, this paper also focuses on the short-run dynamics of the current account balance. Thus, the difference of this study from other studies stems from the examination of the dynamics of current account sustainability not only in the long term but also in the short term.
Author: Harvard University, Cambridge, MA, USA John F. Kennedy School of Government
Publisher: Springer
ISBN: 1349112747
Category : Political Science
Languages : en
Pages : 289
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Book Description
Turkey stands at a crossroad after a decade of adjustment to its severe debt crisis in the late 1970s. This volume brings together a group of contributors who discuss the consequences of this transition and the likely pains for the future.
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Category :
Languages : en
Pages :
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Book Description
In this paper we assess the present sustainability of Turkey's current account position using the framework provided by Milesi-Ferretti and Razin (1996) based on the ability-to-pay and willingness-to-lend model. This framework allows us to assess the structural features and macroeconomic policy indicators. We extend this framework by considering global sustainability indicators as well. Using data for three periods, 1991-1993, 1998-2000 and 2004-2006 we evaluate the present sustainability in light of the prior two crises (1994, 2001). Based on our analysis of these factors in the extended framework, we conclude that Turkey's internal structure and macroeconomic conditions (such as exports and the fiscal position) have improved that are allowing Turkey to continue having large and increasing current account deficits. However, there is vulnerability from global factors namely the impending U.S. recession and a potential global slowdown. This might require some adjustments in policy to continue accumulating large deficits. -- Current account sustainability ; predictors of crisis ; Turkey
Author: Sübidey Togan
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Embarked on an accession path to the European Union (EU), Turkey needs higher investment ratios to sustain high growth rates for a prolonged period so as to sustain convergence with the EU. In a fast medium-term growth scenario, pressures on the current account are likely to emerge as investment will need to increase while fast income growth will also boost consumption and imports. However, in the case of Turkey, large current account (CA) deficits are also likely to be combined with an appreciating real exchange rate, as in the past few years, in response to robust capital inflows as Turkey gets closer to EU accession.
Author: Anil Bolukoglu
Publisher:
ISBN:
Category : Balance of payments
Languages : en
Pages : 77
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Author: Oliver Röhn
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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Book Description
Author: Gian Maria Milesi-Ferretti
Publisher: International Finance Section Princeton University Internati
ISBN:
Category : Business & Economics
Languages : en
Pages : 90
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Book Description
This study presents a notion of current-account sustainability that explicitly considers, in addition to intertemporal solvency, a willingness to pay and to lend. It argues that this notion of sustainability provides a useful framework for understanding the variety of country experiences with protracted current-account imbalances. Based on this notion, the authors identify a number of potential sustainability indicators related to the structure of the economy and the economic policy stance. They use these indicators in the evaluation of the experience of a number of countries that have run persistent current-account imbalances and ask whether they help to discriminate between countries that underwent an external crisis and those that did not.
Author:
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
The aim of this thesis is to identify and assess the reasons of the Turkish financial crises based on various crises model explanations including the first, the second and the third generation models. It is argued that following factors played a crucial role in triggering crises in Turkey. Firstly, under the weak sustainable fiscal policies, implementation of the exchange rate based stabilization program caused the increase in vulnerabilities in the sectoral balance sheets and thus increased the prospective deficit considerations. Secondly, as seen on the international evidence, over-appreciation of the domestic currency put pressure on the current account deficit and other macroeconomic indicators. Thirdly, domestic and external factors also worsen the perceptions on the sustainability of the disinflation program leading to sharp capital outflows. Within this context, fiscal and current account sustainability are empirically tested under the light of the structural break analysis and it is found that fiscal stance and the current account deficit are both weakly sustainable implying the necessity of policy regime changes before the crises period. Having assessed the structural problems of the government, corporate and banking sector’s balance sheets, intersectoral risk matrix was constructed to analyze the risk accumulation in the sectors considering the impacts of the exchange rate based disinflation program and the ongoing economic imbalances. Both mismanagement of the risks and the structural weaknesses of some banks led to the deterioration of the expectations about the continuity of the program, by increasing tensions and prospective deficit perceptions in the markets. With speculative attacks, a sharp capital outflow was triggered the crises. It is concluded that the causes of the 2000-2001 Turkish financial crises can be interpreted as an example of financial crises model encompassing all elements of the earlier models except seignorage issues.
Author: Ferhat ÇITAK
Publisher: Hiperlink Eğitim İletişim Yayın Gıda Sanayi ve Pazarlama Tic. Ltd. Şti.
ISBN: 6258461662
Category :
Languages : en
Pages : 159
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Book Description
Energy sources have always been an essential part of world economies. Availability of energy resources has a vital role for a country’s economic growth and financial development. Contrary to fossil fuels, many countries have the potential to power their economies by renewable energy sources. This study aims to investigate the effects of different energy resources on the financial development of countries. In particular, the paper analyzes the impact of renewable, non-renewable, and nuclear energy resources on the financial development of 28 countries with nuclear energy reactors for 2001-2019. Empirical results show that natural gas and renewable energy resources have a positive and significant impact on financial development of a country.
Author: Sebastian Edwards
Publisher: University of Chicago Press
ISBN: 9780226184944
Category : Business & Economics
Languages : en
Pages : 782
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Book Description
Economists and policymakers are still trying to understand the lessons recent financial crises in Asia and other emerging market countries hold for the future of the global financial system. In this timely and important volume, distinguished academics, officials in multilateral organizations, and public and private sector economists explore the causes of and effective policy responses to international currency crises. Topics covered include exchange rate regimes, contagion (transmission of currency crises across countries), the current account of the balance of payments, the role of private sector investors and of speculators, the reaction of the official sector (including the multilaterals), capital controls, bank supervision and weaknesses, and the roles of cronyism, corruption, and large players (including hedge funds). Ably balancing detailed case studies, cross-country comparisons, and theoretical concerns, this book will make a major contribution to ongoing efforts to understand and prevent international currency crises.
