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on Central and Western Asia |
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Issue of 2015‒01‒31
thirteen papers chosen by Christian Zimmermann Federal Reserve Bank of St. Louis |
| By: | Hasan Comert (Department of Economics, METU ); Selman Colak |
| Abstract: | This paper focuses on the impacts of the recent global crisis on the Turkish economy and the policy measures taken in response to the crisis. Turkish economy was adversely affected by the crisis through mainly three channels, namely expectations channel, trade channel and financial channel. The distinctive characteristic of the crisis was a severe export shock which can account for an important part of the decline in production in Turkey. Beside this, a significant sudden stop in financial flows worsened the credit conditions in the economy. As a result, the Turkish economy witnessed one of its worst economic down-turns after the Second World War. In fact, the Turkish growth performance was one of the worsts among developing countries. However, as opposed to previous crises, the financial markets in Turkey and many other developing countries did not experience a collapse. We argue that this is mainly related to the small magnitude and short duration of the financial shocks hitting Turkey and other developing countries relative to the ones in the previous decades. In this sense, the Turkish economy might not have been fully tested during the last global crisis. How the economy will behave in case of a larger financial shock is still unknown. |
| Keywords: | Turkish Economy, Developing Countries, Recent Global Crises, Financial Flows, Monetary and Fiscal Policies. |
| JEL: | F32 E63 E66 G01 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:met:wpaper:1417&r=cwa |
| By: | dogru, bulent |
| Abstract: | Abstract: In this study, the relationship between inflation and inflation uncertainty is analyzed using Granger causality tests with annual inflation series covering the time period 1923 to 2012 for Turkish Economy. Inflation uncertainty is measured by Exponential Generalized Autoregressive Conditional Heteroskedastic model. Econometric findings suggest that although in long run the Friedman's hypothesis that high inflation increases inflation uncertainty is strongly supported, in short run the Holland hypothesis proposing that the increase in the inflation uncertainty decreases inflation is also supported for Turkish Economy. We also make analyses for subsample periods selected due to the major policy changes in Turkish economic history. The causality between inflation and inflation uncertainty in these subsample periods is mixed and depends on time period analyzed. |
| Keywords: | Inflation Uncertainty, Conditional Variance, Granger Causality, Exponential Generalized Autoregressive Conditional Heteroskedastic Model |
| JEL: | C4 C40 E40 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61384&r=cwa |
| By: | Glauben, Thomas ; Imamverdiyev, Nizami ; Perekhozhuk, Oleksandr ; Prehn, Sören |
| Abstract: | Due to an increase in export shares of Kazakhstan, Russia and Ukraine (KRU) the competition in global wheat market has become more intense during the last decade. Hence, this study aims to analyze the market structure of KRU over the period 2004-2010. By using the gravity trade model and Poisson Pseudo Maximum Likelihood (PPML) estimation method, this study confirms that the emergence of KRU increases the competition in international wheat market. The other main finding is that there is no evidence of market power of KRU wheat exporters over the South Caucasian and Central Asian countries. |
| Keywords: | gravity model, exchange rate, perfect competition, Poisson Pseudo Maximum Likelihood estimation, International Relations/Trade, |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae14:182949&r=cwa |
| By: | HASAN ENGIN DURAN (City and Regional Planning Department, Izmir Institute of Technology, Turkey ) |
| Abstract: | The aim of the present article is to investigate the economic determinants of the synchronization across regional business cycles in Turkey between 1975-2010. The vast majority of studies in this field have concentrated on well known determinants, such as interregional trade, financial integration and industrial specialization, while largely ignoring spatial and geographical factors including differences across regions in agglomeration, localization economies, market size and urbanization In this article, we incorporate these variables into our analysis and evaluate their roles in the comovement of regional business cycles. Our findings indicate two major results: First, low degree of synchronization during 1975-2000 has switched to relatively more correlated and synchronously moving regional cycles during 2004-2010. Second, having tested the variety of determinants, we find that the pairs of regions that have more similar industrial structure and market size, and arbitrary degree of agglomeration and urbanization tend to synchronize more. Significance of these variables is robustly evident regardless of the time period analyzed and of the type of methodology employed. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tek:wpaper:2015/01&r=cwa |
| By: | Fındık, Derya ; Beyhan, Berna |
| Abstract: | This paper aims to introduce a qualitative indicator to measure innovation performance of Turkish firms by using firm level data collected by Turkish Statistical Institute (TURKSTAT) in 2008 and 2009. We propose a new indicator to measure the innovation performance which is simply based on the perception of firms regarding to the impacts of innovation. In order to create performance indicators we conduct a factor analysis to group the firms’ perceptions on the impacts of innovation. Factor analysis gives us product and process oriented impacts of innovation. There are significant differences among product innovators, process innovators and firms engaged in both product and process innovations with respect to their perceptions on product and process oriented impacts of innovation. Among these three groups, product and process oriented impacts provide a highest value for the firms that perform both product and process innovations. As far as the link between firm characteristics and the impact of innovation is considered, there is a significant difference between small and large firms with respect to their perceptions on product oriented impact of innovation.While product oriented impact are larger for small firms, large firms focus more on process oriented impact. Anova results also indicate that perceptions on process oriented impact significantly differ among exporter firms, domestic market oriented firms and firms being active in internal and external markets. Process oriented impact generate results in favor of exporting firms. |
| Keywords: | innovation impact, product oriented impact, process oriented impact |
| JEL: | L2 M1 M2 O3 |
| Date: | 2014–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:60961&r=cwa |
| By: | Tuncer Bulutay (Turkish Economic Association, Ankara, Turkey ) |
| Abstract: | Bu yazıda, Türkiye Ekonomi Kurumu ve Atatürk Üniversitesi İktisadi ve İdari İlimler Fakültesi’nin 24, 25 ekim 2013 tarihinde ortaklaşa düzenledikleri 17. Ulusal İktisat Sempozyumu’na sunduğum büyüme konusundaki görüşlerimi genişleterek açıklıyorum. Sempozyum’da gerçekleşen güzel ve kaliteli toplantılar için sözkonusu Kuruma ve Fakülteye teşekkür ediyorum. Yazıda, belirtilen konuları önceki yazılarımda da incelemiş olduğum ve tekrarlardan kaçınmak istediğim için açıklamalarımı, bazı konuları inceleme dışı bırakarak ve 2002, 2003 yılları sonrası üzerinde yoğunlaşarak sunacağım. Konuyu iki temel başlık altında inceleyeceğim. Açıklamalarımda toplantılarda sunulan değerli görüşlerden de yararlanacağım. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:tek:wpaper:2015/03&r=cwa |
| By: | Gafarova, Gulmira ; Perekhozhuk, Oleksandr ; Glauben, Thomas |
| Abstract: | As a result of some important changes in the international wheat market, market shares of leading exporters have recently altered. The Black Sea region countries – Kazakhstan, Russia and Ukraine have become important wheat exporters. Consequently, the pricing behavior of these countries has become a key issue. By applying the pricing-to-market model to annual wheat exports, this study analyses price discriminating behavior of the KRU exporters in foreign markets during 1996-2012. The results demonstrate that even though the KRU countries are able to exercise price discrimination in some importing countries, they usually face perfect competition in most destinations. |
| Keywords: | fixed-effects model, mark-up, price discrimination, pricing-to-market, wheat export, Demand and Price Analysis, International Relations/Trade, |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae14:182656&r=cwa |
| By: | Esenaliev, Damir ; Gregory Kisunko ; Kisunko, Gregory |
| Abstract: | The paper investigates determinants of civic participation in local budget processes in rural areas in the Kyrgyz Republic by using data from the Life in Kyrgyzstan survey, conducted in 2012. The analysis of the data suggests that although civic awareness and interest in local budget processes is relatively high, the participation rate in local budgeting processes is low. The paper also shows that interest, awareness, and participation are positively associated with the age, education, employment, risk-taking attitudes, trust, and social capital of respondents. The paper documents that unawareness and lack of participation are largely related to being female, of non-Kyrgyz ethnic origin, inactive in the labor market, recent internal migrants, and residents of communities with poor infrastructure. |
| Keywords: | Debt Markets,Housing&Human Habitats,Governance Indicators,Knowledge for Development,Population Policies |
| Date: | 2015–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7154&r=cwa |
| By: | Oliver Borszik (GIGA German Institute of Global and Area Studies ) |
| Abstract: | This paper seeks to explain how Iran’s regime persisted in the face of international sanc-tions during Mahmud Ahmadinejad’s presidency, from 2005 to 2013. It reconstructs the interplay between the intensifying UNSC, US and EU sanctions and the targeted regime’s strategies to advance the nuclear program and maintain intra-elite cohesion. Initially, the nuclear program was expanded due to high oil income in combination with explicit resistance to the presumed regime-change ambitions of the Western sanction senders. At the end of Ahmadinejad’s presidency, the decline of foreign exchange earnings from oil exports and the continued regime-change scenario contributed to the neglect of this regime-legitimizing strategy in favor of the maintenance of intra-elite cohesion. My main argument is that once the US and EU oil and financial sanctions curtailed the cost-intensive further development of the nuclear program, Supreme Leader Ali Khamenei used these sanctions as an external stimulus to contain burgeoning factional disputes. |
| Keywords: | Iran, international sanctions, authoritarian regimes, nuclear strategy, factional disputes |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:gig:wpaper:260&r=cwa |
| By: | Martuscelli, Antonio ; Varela, Gonzalo |
| Abstract: | This paper analyzes the determinants of export flow survival in Georgia. The paper uses a unique Georgian firm-level data set, in which firms'characteristics and output dynamics are matched with their customs'export transactions, for the period 2006-12. A discrete survival model is used to explore the role of firm level characteristics, diversification strategies, and network effects on the survival rates of export flows. Low survival rates at the product level are found to limit the ability of Georgian firms to consolidate new products in international markets. The analysis finds that it is production efficiency, rather than size, that boosts export survival chances, that firms’ diversification strategies matter for the prospects of survival, and that there is strong evidence of network effects in export survival. The analysis also finds that ratified foreign trade agreements contribute to increase the survival of export flows by reducing policy-induced trading costs and increasing information about destination markets. |
| Keywords: | Markets and Market Access,Microfinance,Economic Theory&Research,Small Scale Enterprise,Debt Markets |
| Date: | 2015–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7161&r=cwa |
| By: | S. F. Dizaji ; M. R. Farzanegan ; A. Naghavi |
| Abstract: | This study examines how quality of political institutions affects the distribution of government budget in Iran. We first introduce a mechanism through which this can shift government expenditure from patronage to more constructive public spending. Using impulse response functions (IRF) and variance decomposition analysis (VDC) on the basis of Vector Autoregressive (VAR) model, our results imply that a positive shock towards more democratic institutions leads to negative and statistically significant response of military spending and positive and statistically significant response of education expenditures. Our results are robust to different political institutional quality indicators, ordering of variables in the VAR and different specifications of government spending categories. |
| JEL: | H11 H41 P16 O53 O43 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:bol:bodewp:wp986&r=cwa |
| By: | International Monetary Fund. Monetary and Capital Markets Department |
| Abstract: | The Georgian banking sector is sound and stable and has continued to perform well, but faces a number of key risks and vulnerabilities that need to be closely monitored. Particularly challenging among them are credit and funding risks related to dollarization, concentration in the banking sector, and reliance on nonresident deposits. While NPLs are gradually declining from their peak in 2009, credit growth is above its long-term sustainable trend. Dollarization presents specific challenges as it increases credit and liquidity risks. There are two major dollarization-related problems: First, most of the borrowers in U.S. dollars (USD) are unhedged, as their income and expenditures are in national currency (this is especially evident in case of households). Second, the NBG has limited ability to provide liquidity support in USD and other foreign currencies. However, it should be noted that the NBG is implementing a set of macroprudential measures aimed at making FX lending more expensive for banks. For example, current risk weights for FX loans are topped at 175 percent. Separate stress tests (STs) performed by the NBG and by the FSAP mission show that the banking system as a whole is able to withstand severe shocks, given that most banks maintain healthy capital buffers well above regulatory minimum. The tests were conducted in several scenarios ranging from slow growth to severe macroeconomic shocks, and the results show that major banks would generally remain adequately capitalized, taking into account current profits and introduction of Basel II. In adverse scenarios, recapitalization needs are manageable in terms of GDP (1.6 percent for the worst-case scenario). At the same time, uncertainty due to non-linearity of shocks related to lari depreciation warrant continuation of build-up of capital buffers as long as FX denominated loans constitute substantial share of banks’ loan portfolios. Credit portfolio concentration risks are limited: default by the largest three borrowers would require additional capital of GEL 50 million for five banks. Market risks are very limited, and trading books do not exist. However, some banks are particularly vulnerable and need to strengthen their capital buffers and to mitigate funding risks. These banks exceed the minimum capital requirement by only a few percentage points (p.p.), which limits their loss-absorption capacity. The high level of profitability and solid net interest margins would go down during crisis periods, driving down net interest and other income. To avoid this pitfall, it is important to introduce Individual Capital Guidance, especially for the weakest banks. When it comes to funding risks, further diversification of funding sources and de-dollarization could help to minimize identified vulnerabilities. |
| Keywords: | Financial Sector Assessment Program;Banking sector;Liquidity;Credit risk;Stress testing;Economic models;Statistical annexes;Georgia; |
| Date: | 2015–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:15/7&r=cwa |
| By: | International Monetary Fund. Monetary and Capital Markets Department |
| Abstract: | There have been significant improvements in both the quality of regulation and the supervisory approach since the 2007 FSAP. Many amendments to existing laws, new laws, and regulations have been introduced, aimed at addressing shortfalls identified in the 2007 FSAP. These improvements will be evident throughout this assessment. At the same time, a number of weaknesses have been identified. Among these is an operational risk within the NBG’s own Banking Supervisory Department. There has been a very high level of staff turnover in recent years due to a lack of salary competitiveness vis-à-vis the commercial banks, and there appears to be over-reliance on key personnel. Also, the level and type of staff training need to be expanded. While the NBG puts significant effort into understanding the risk profile of each individual bank and the banking system as a whole, more attention is needed to improve the quality of risk management of the banks. In a number of areas, notably bank licensing, the NBG relies on its broad supervisory powers to carry out its functions in the absence of detailed explicit powers. While this regime generally seems to work well in practice, it could leave the NBG open to challenge where these broad powers are not supported by more granular powers. Recently, several amendments to the legislation have been introduced in order to address these shortcomings. |
| Keywords: | Financial Sector Assessment Program;Banking sector;Bank supervision;Reports on the Observance of Standards and Codes;Georgia; |
| Date: | 2015–01–08 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfscr:15/10&r=cwa |