Turkish Economy Research Articles

The Impact of the 2018 Crisis and Covid 19 Pandemic on Macroeconomic Indicators

The aim of this study is to reveal the impact of both the increase in exchange rates and the Covid-19 pandemic on macroeconomic variables. For this purpose, the effects of exchange rate and the dummy variable, which are used to represent the Covid-19 pandemic, on the variables of unemployment rate, general level of prices, credit card expenditures, consumer confidence index and housing price index were analyzed by constructing five different econometric models. Model coefficients were estimated with the two-stage Engle-Granger method and Dynamic Ordinary Squares (DOLS) method. The relationships between the variables were examined by using quarterly data between 2014.I-2023.III. According to the analysis results, due to the increase in the exchange rate, the consumer confidence index has decreased, whereas the unemployment rate, general level of prices, housing prices and credit card expenditures have increased. The same results have been obtained for the period of Covid-19 pandemic. In addition, the response of relevant variables to shocks in the exchange rate was examined with the VAR model. According to the analysis results, while the unemployment rate, general level of prices, housing price index and credit card expenditures react positively to a 1 standard deviation shock in the exchange rate, the consumer confidence index reacts negatively. Therefore, the 2018 crisis and the Covid-19 pandemic have adverse effects on the Turkish economy.

THE IMPACT OF UNEMPLOYMENT AND INFLATION ON ECONOMIC GROWTH IN TUKEY

Introduction: The impact of unemployment and inflation on economic growth in Turkey is considered as an important issue in the economic literature on Turkey. Unemployment and inflation are factors that directly affect economic stability and the welfare of citizens. In this context, it is critical to understand and interpret the effects of unemployment and inflation rates on economic growth and to formulate and implement economic policies in line with the realities. Analyzing Turkey's unemployment and inflation dynamics is a very important issue in this sense. In addition, this concept and data play an important role in providing guidance for policymakers in evaluating economic performance and implementing new economic policies. When today's Turkish economy is evaluated in general terms, it reveals the reality of Turkey, which has suffered serious losses in the last five years, a decrease in purchasing power, an increase in the prices of goods and services and an inflation rate of 150%. Objective: To investigate and determine the effects of unemployment and inflation on economic performance in Turkey within a specified period of time. To establish the relationship between unemployment and inflation on Real Gross Domestic Product in Turkey. Design, Methodology and Approach: The Ordinary Least Squares (OLS) technique was adopted with various diagnostic tests to determine how appropriate the data is for the analysis. The study uses only OLS and Diagnostics to perform the analysis and covers only the period from 1990 to 2021. Results: The result of the diagnostic test shows that the data for the analysis is stationary at level and there are 2 cointegration equations indicating that there is a long-run relationship between GDP, Unemployment and inflation. Conclusion: Unemployment and inflation are positively related to economic growth.

Coup d'état and economic growth in Turkey: Evidence from ARDL bounds testing procedure

In seven decades of the multiparty democracy period, Turkey has experienced four military coups. Even though the coups are thought to be a cold war phenomenon in the literature, they are still relevant. The failed coup attempt in 2016 reminds us that the military coup is still a critical issue in Turkish democracy and the economy. Interestingly, there is not an adequate amount of empirical research on the political economy of Turkey?s military coup experience. This study?s motivation is to provide empirical evidence for the economic growth-coup nexus literature with a core focus on Turkey, which is a remarkable case in many aspects. For this purpose, we extend an open-economy Cobb-Douglas production function with coups and use the autoregressive distributed lags (ARDL) method for the period 1950 to 2014. According to the study?s empirical findings, coup d??tats negatively affect real GDP in Turkey. Through structural reforms, Turkey should strengthen its democratic institutions to prevent such antidemocratic attempts.

Odnos ruskog i turskog sektorskog tržišta akcija - uticaji sukoba između Rusije i Ukrajine

In this paper, the effects of the Russia-Ukraine conflict on the stock markets of Turkey (BIST), which has strong economic relations with both countries, and Russia (MOEX), one of the parties to the conflict, are investigated. The relationship between the stock indices for the overlapping sectors of both stock markets (namely the consumption, electricity, financial, oil and telecom sectors) are examined using the Fourier volatility spillover and Fourier-Granger causality tests. The findings of the paper indicate that there is a bidirectional causality relationship between both countries in the electricity sector, and a causality relationship between BIST and MOEX in the telecom sector. In addition, there is a bidirectional volatility spillover in the electricity, finance and oil sectors between the stock markets of the two countries. However, there is also a volatility spillover from MOEX to BIST in the food sector. The COVID-19 epidemic and the Russia-Ukraine war can be quoted as the reasons for this situation. This volatility spillover between the countries seems likely to harm the Turkish economy in the case of possible negative developments during the war. The results obtained in this study provide valuable information for portfolio diversification to the investors who will invest in these sectors as long as the war conditions continue.

The Tourism-Based Environmental Kuznets Curve Hypothesis: Evidence From the Turkish Economy

This study aimed to determine the impact of tourism on environmental pollution and test the validity of the Environmental Kuznets Curve (EKC) hypothesis for the Turkish economy based on data from 1975–2018 in cubic form by observing the impacts of tourism indicators on the environment. We analyzed the correlations among per-capita ecological footprint, international tourist arrivals, per capita GDP, the social globalization index, and urbanization rate using the ARDL limit test. Based on our research, we have found evidence that during the study period, there is an N-shaped correlation between tourist arrivals and ecological footprint in the Turkish economy. This contradicts the idea of an inverted U-shaped Kuznets curve for both the short- and long-term. Our findings reveal that domestic and national policies to fight against pollution need to be developed rather than wasting time by waiting for the end of the relationship between tourist arrivals and environmental pollution after a certain milestone.

TÜRKİYE'NİN AB ÜYELİĞİ KİŞİ BAŞINA GSYİH'NİN YÜKSEK GELİRLİ EKONOMİYE YAKINSAMASINI SAĞLAYACAK MI?

This study aims to investigate possible developments in the Turkish economy, in case Türkiye becomes a full member of the European Union (EU), by examining the economic performances of the new members of the EU in the 2000s. The study covers thirteen-member countries that were accepted as full members of the EU in the 2000s and Türkiye, which is a candidate country to the EU. Eight (there were seven members when the study was done) of the new members are also in the Euro Area (Eurozone). While eleven of the new members are located in Central and Eastern Europe, Malta and Cyprus are two island countries located in the Mediterranean. After testing the normality of GDP per capita for the country set, the correlation between the countries was investigated. The growth performance with growth convergence equation and breakpoints with different unit root tests in Gross Domestic Product (GDP) per capita of the member countries before and after the membership were also analysed by time series and panel data. Lithuania has the best performance in income per capita increase in 1995-2021 period whereas Romania has the second and Latvia has the third best performance. Due to the convergence theorem, new member countries have highest growth rate than the EU and Euro Area in income per capita in 1995-2021 period.

Turkish Economy in the Spiral of Global Capitalism and the Western Alliance: Economic Policies of Adnan Menderes Governments

Türkiye’de 1950’li yıllar siyasal liberalizmin yapısal temellerinin atıldığı savaş sonrası dönemin bir laboratuvarı mahiyetindedir. Genel itibarıyla çok partili yarışmacı siyasal düzen şeklinde tarif edilen bu dönemin dikkatlerden kaçan bir özelliği de demokratik Batı ülkeleriyle iktisadi alanda kurulan sıkı ilişkilere sahne olmasıdır. Liberal ekonomi düzeninin yerleştirilmeye çalışıldığı Demokrat Parti döneminin tek parti dönemiyle kıyaslandığında oldukça istisnai denilebilecek bir ekonomi politikasına yönelmesi, Türkiye’nin savaş sonrası dünyada kapitalist düzene eklemlenme çabalarını yansıtmaktadır. Bu çalışmada, Menderes hükümetlerinin ekonomi alanında takip ettiği iktisat politikalarının incelenmesi suretiyle döneme ilişkin bütünlüklü yorumlamalara gidilmeye çalışılmıştır. Dönemi konu alan monografik eserler, basın ve meclis zabıtları çalışmanın temel kaynaklarını oluşturmaktadır.

Türkiye’de Enflasyon İstikrarsızlığı Çevre Kirliliğine Neden Olur mu? Fourier-Wavelet Nedensellik Testinden Kanıtlar

The Turkish economy has faced many macroeconomic problems in terms of GDP stability, inflation stability, growth rate, and exchange rate. This situation has become even more noticeable in recent times, especially with the negative effects of the Covid 19 epidemic and the Russia-Ukraine war. Thus, inflation in Turkiye has increased and has a more unstable outlook. However, environmental problems have also increased. In light of this information, the aim of the study is to examine the causality relationship between inflation instability and environmental pollution for the period 1990-2021 by considering growth, energy consumption, and financial development as control variables in Turkiye. For this purpose, firstly, the series was subjected to wavelet transform. Afterwards, the transformed series were analyzed with the Fourier TY and Fractional Fourier TY causality tests as short, medium, and long term. Findings from the Fourier causality test show that inflation instability promotes environmental pollution in the short, medium, and long term. According to the Fractional Fourier causality test, which I used to test whether the shocks are permanent, there is persistence from inflation instability to environmental pollution only in the medium term. This study is the first to examine the subject in the case of Türkiye.

THE IMPACT OF 2023 KAHRAMANMARAŞ EARTHQUAKES ON REAL ESTATE RELATED SECTORS: AN EVENT STUDY ANALYSIS

Kahramanmaraş earthquakes devastatingly hit the northern Syria and 11 provinces of Türkiye, causing thousands of deaths, injuries and property losses. The magnitude of the earthquakes and the extent of their impacts were huge enough to affect the entire Turkish economy. Real estate industry has been one of the most affected sectors as thousands of buildings were collapsed or damaged by the quake. This study aims to explore the impacts of Kahramanmaraş earthquakes on real estate related sectors in the Turkish stock market: Construction, cement-concrete, iron-steel, real estate investment trusts, and insurance. Using an event study methodology, our short-run analyses indicated that all given sectors were affected by the earthquakes. According to our findings, abnormal returns varied among the sectors: The construction materials sectors had positive abnormal returns while the insurance sector did abnormal returns on the opposite way. The findings are vital for market participants, policymakers and governments.

Türkiye’de Bölgesel Kayıt Dışı İstihdam ve Makroekonomik Değişkenler Arasındaki Karşılıklı Dinamik İlişkiler: Bir Panel VAR Analizi

The presence of the informal economy and unregistered employment engenders adverse working conditions and job insecurity and diminishes tax revenues. Post-2000, Türkiye has placed considerable emphasis on fighting the informal economy and unregistered employment. Nevertheless, current data from the Social Security Institution reveals a 29% unregistered employment rate. Numerous factors affect the informal economy, with their impact contingent on the developmental status of economies. In Türkiye, characterized by substantial regional disparities, policymakers must account for regional heterogeneities. Within this context, an examination of the dynamic relationship between unregistered employment and key economic indicators such as growth, unemployment, and inflation in the Turkish economy is conducted using a homogeneous panel VAR model. Moreover, the study delves into gender-specific distinctions in unemployment rates and their relationship with unregistered employment. Utilizing annual data spanning 2009 to 2021 from NUTS 2 of TURKSTAT, the findings underscore the necessity for unregistered employment policies to address regional variations. Significantly, the interdependence between registered and unregistered economies underscores the guiding role of the unregistered sector within the registered economy. Hence, it is suggested that fighting unregistered employment may require a fundamental redesign of the current economic production structure to mitigate its prevalence.

Evaluation of the Impacts of Climate Change on Sunflower with Aquacrop Model

Climate change has become one of the most significant risk factors in agricultural production. Plant productivity declines caused by climate change pose a serious threat to food supply and security. Crop simulation models have been widely used in recent years for the assessment of the impacts of climate change on agricultural production. In Konya, there have been limited studies on the potential effects of climate change on sunflower production. Sunflower, the main crop of the most imported agricultural product group, in which the production amount is currently insufficient to cover domestic consumption demand, is strategically important for the Turkish economy. The goal of this study was to examine the effects of climate change on sunflower yield in Türkiye by using the Aquacrop model. The data of the field experiment carried out on the Ekllor sunflower cultivar for two years in Konya conditions were used as material. The daily projection dataset of three Global Climate Models (HadGEM2-ES, MPI-ESM-MR, GFDL-ESM2M) and two scenarios (RCP4.5 and RCP8.5) were used to analyze climate change impacts. The 1971-2000 period was considered as the reference period and the 2022-2098 period was selected as the future period. The results confirmed that the Aquacrop model was able to satisfactorily simulate yield with NRMSE 2.10 % for the rainfed condition and 10.55 % for the irrigated condition, a d-index of 0.97, and a modeling efficiency of 0.91. Aqaucrop climate change impacts simulation which was based on 3 global climate models covering with 2022 -2098 period simulations projected that sunflower yield would be decreased in a range of 21% to 44% for RCP4.5 and 18% to 50% for RCP8.5 scenarios under rainfed conditions. In contrast, the yield would be increased in a range of 11% to 23% for RCP4.5 and 10% to 33% for RCP8.5 scenarios under irrigated conditions. The findings point to the use of appropriate water management measures for future sunflower production as a means of adapting to climate change.

Challenges faced by foreign companies in Turkey due to volatility of the local currency

Even though the working climate in Turkey is widely considered positive, many foreign enterprises have found success there. Local currency fluctuation is one of the key difficulties that foreign enterprises have noticed. This project focuses on currency mercurial in the context of Turkish foreign firms. Secondary means of collecting data have been employed in this project. Information has been gathered from the articles. It has been observed that currently, it is critical for the sustainability of international companies as the Turkish Lira is continuously fluctuating, and this was considered the most terrible time for the economy to return to the previous spirit. Certain factors have affected the Turkish economy, and this instability has brought challenges not only for the international company’s survival but also for the domestic companies. It has been concluded that it is affecting the financial performance of the companies and is empirically supported by past studies. It will make investing easier for anyone interested in the Turkish market. It also helps them foresee their profitability and estimate their risk. It is regarded as a crucial tool for decision-makers to determine the intended course of action in light of the impact of currency mercurial and to enable them to modify their policies in light of the present dynamics.

The Investor Behaviour, Risk Perception and Expectations on Cryptocurrency Markets

The financial sector, which has sparked increasing organizational and scientific interest in recent years, plays a vital role in the Turkish economy. After enduring multiple economic downturns, consumers have become more cautious when considering financial investments, making it challenging for financial institutions to formulate effective marketing strategies. This study aims to shed light on investor behavior in Tukish markets. The results of two surveys are examined: the first conducted in the final quarter of 2022, and the second in the first quarter of 2023. This article delves into various variables, including stress levels, portfolio holding times, investment choices, and attention to cryptocurrency markets. The methodology employs the Mann-Whitney U test, Cronbach's Alpha, Kolmogorov-Smirnov, and Shapiro-Wilk normality tests. The findings from the two surveys are compared. Based on the analysis results, it can be inferred that respondents' investment preferences and risk tolerance have evolved over time. The results demonstrate a spectrum of portfolio diversification tendencies.

Analysis of Turkey's classic and financial kuznets curves in regards to the level of development and increased distribution

In this research, we probe the authenticity of both the Financial Kuznets Curve hypothesis and the classical Kuznets curve within the Turkish economy, exploring the interrelation between financial development and income distribution. By employing the ARDL bounds test approach in the econometric analysis, we ascertain that the Financial Kuznets Curve is applicable to Turkey. This means the correlation between income distribution and the extent of financial development adopts an inverted U-shaped pattern. Moreover, the interrelation between GDP and income distribution doesn’t form an inverted U pattern, demonstrating that the classical Kuznets curve is not pertinent in the context of Turkey. From the derived outcomes, it is inferred that prioritizing policies that accentuate financial development would constitute a more judicious economic strategy in Turkey, particularly for redressing disparities in income distribution, instead of merely focusing on economic growth.

Creative Class in Türkiye: New Job Prospects

This paper covers a comprehensive study of the creative class in Türkiye in terms of new job prospects. Nowadays, creativity is one of key skills necessary for future jobs. People, who have creative and innovative thinking, generate original ideas and produce unique products, form a special stratum of society called creative class. Creative class professionals include scientists, teachers, artists, models, social media influencers, etc. This article is intended to outline the specifics of new type of workers’ lifestyle which implies comfortable living conditions known as “quality of place.” In order to clarify how ready Türkiye is for the development of the creative class, the state of the labor market is analyzed. It has been revealed that the Turkish labor market is characterized by both strengths (e.g. large population, a large share of the youth, increase in labor productivity) and weaknesses (e.g. labor underutilization, limited female labor participation, lack of skills). People mainly work in agriculture, industry, service sector and construction. These characteristics outline the basis for the rise of the creative class and the emergence of new careers in Türkiye. Correspondingly, this research is aimed at analysis and assessment of factors, circumstances and preconditions for the emergence of the creative class in Türkiye as well as determining the creative class job opportunities. The methodology of the study is founded on exploring new and potential jobs that will be required by the future. The article presents a framework for the assessment of the creative class in Türkiye based on the standard measures of job quantity, as well as job quality and labor market inclusiveness. The paper proposes the vision of how Türkiye can drive talent transformation and upskill its workforce in order to satisfy demand for innovative type of workers and take advantage of new opportunity. This study provides a unique and vital contribution to ongoing discussions about the significance of the creative class for employment highlighting the universalized assumptions concerning the position of these professionals in the Turkish economy.

Import Dependence of Exports, Aggregate Demand and Income Distribution in the Turkish Economy: A Post-Keynesian Econometric Analysis

This study aims to investigate the impact of import dependence on exports on the relation between aggregate demand and functional distribution of income in the Turkish economy. To achieve this, the model proposed by Stockhammer, Hein, and Grafl (2011) was employed and applied to the Turkish economy throughout 1988-2019. The findings indicate that the demand regime was wage-led in Türkiye throughout the sample period, and the integration of import content of exports into the analysis renders the demand regime even slightly more wage-led. Subperiod analyses show that even though the negative effect of a higher labor share in total income on net exports has doubled in absolute value from the 1995-98 subperiod to the 2008-18 subperiod, the positive effect of a higher labor share on private consumption expenditures did not only counterbalance but exceeded it, while its negative effect on private investment remained relatively small and constant over the subperiods. Our findings also show that the integration of import content of exports into the analysis also rendered all the subperiods moderately more wage-led.

A Evaluation on the Turkish Economic Congress and Economic Policies of The Early Republican Era (1923-1929)

Bu çalışmada, 1923 yılında İzmir'de gerçekleştirilen Türkiye İktisat Kongresi ve 1923-1929 döneminde tesis edilen iktisat politikaları incelenerek, erken cumhuriyetin çalışmaya konu olan dönemi boyunca uygulanan politikaların niteliğine dair bir değerlendirme yapılması amaçlanmıştır. Bulgular, Devlet Arşivleri Başkanlığı Cumhuriyet Arşivi (BCA) ve Türkiye Büyük Millet Meclisi Arşivi’nde bulunan belgeler ile resmi istatistik ve resmi gazete kayıtlarından oluşan birincil kaynaklar ve telif/inceleme eserlerin oluşturduğu çeşitli ikincil kaynakların incelenmesiyle elde edilmiştir. Çalışmanın ulaştığı temel sonuç, Türkiye İktisat Kongresi ve kongre sonrası dönemde uygulanan iktisat politikalarının liberal bir niteliğe sahip olmadığı ve 1930’la başlayan devletçilik dönemine ait iktisadi politikaların, 1923-1929 arasında uygulanan liberal politikaların başarısızlığı sonucunda tesis edilmediğidir.

Digital Economy and Comparative Analysis of Turkey's Digital Economy Indicators with Selected EU Countries

Amaç - Çalışmanın temel amacı, Türkiye’nin dijital ekonomiye adaptasyon sürecinin incelenmesidir. Türkiye AB adayı bir ülkedir. Bu nedenle birlik üyesi ülkeler ile karşılaştırma yapılmış, Türkiye’nin bu ül-keler karşısında hangi yönlerini geliştirmesi gerektiği tespit edilmeye çalışılmıştır. Eksik yönler belirlenerek bu eksiklikleri giderecek politikalar oluşturulursa Türkiye’nin dijital ekonomiye daha hızlı ve kolay adapte olması sağlanabilir.
 Yöntem/Metodoloji/Dizayn- Çalışmada, nitel analiz yöntemi kullanılmıştır. 2023 yılında yayınlanan en güncel Küresel İnovasyon Endeksi raporundaki göstergeler incelenmiştir. 2023 yılı raporuna göre genel endeks puanı en yüksek ve en düşük olan AB ülkeleri ile Türki-ye arasında karşılaştırma yapılmıştır. En yüksek puan İsveç’e, en düşük puan ise Romanya’ya aittir.
 Sonuçlar- Türkiye’nin dijital ekonomiye adaptasyon sürecinde özel-likle kurumsal kaliteyi artırması gerektiği ifade edilebilir Politik ve operasyonel istikrar, işten çıkarma maliyeti, iş yapma politikaları Türkiye’nin kurumlar boyutundaki zayıf yönlerini oluşturmaktadır. Ayrıca Türkiye’nin ekolojik sürdürülebilirlik konusunda AB ülkelerinin geri-sinde kaldığı, çevreye duyarlı bir ekonomik yapı oluşturma konusunda daha somut adımlar atması gerektiği görülmektedir.
 Katkı/Farklılıklar- Küresel İnovasyon Endeksi, ele alınan göstergelerin çeşitliliği ve inceleme yapılan ülke sayısı ile dijital ekonomiyi bütünsel olarak yansıtan ölçüm yöntemlerinden biridir. Bu endekste yer alan bütün boyut ve göstergeleri ayrıntılı olarak incelemesi, Türki-ye’nin AB ülkeleri karşısındaki durumu hakkında bilgi vermesi açısından çalışmanın önemli olduğu ifade edilebilir.

Long shadows of the walking dead on economic activity

This paper presents the panorama of zombie firms in the Turkish economy, which are highly inefficient, highly indebted firms that have low or sometimes negative productivity, and provides an analysis of the impact of these firms on economic activity for the period 2012–2015. Our results suggest that the number of zombie firms in Türkiye has increased. The share of these firms in sales and employment has also increased, but at a lower rate. These firms are mainly found in low-technology manufacturing and transportation and distribution services. The paper also shows that healthy firms increase total factor productivity, employment growth, and the investment-to-capital ratio in the economy in a robust manner. The sales of zombie firms have no distorting effect on the economic activity of healthy firms. However, capital sunk into zombie firms has a differential impact on the performance of healthy firms. When the share of zombie capital in a sector increases, the TFP growth of manufacturing firms decreases, while the employment growth of medium-sized service firms increases.

Sentiment analysis of reviews on cappadocia: The land of beautiful horses in the eyes of tourists

Abstract The Cappadocia region is one of the most popular tourist destinations in Turkey, and its tourism sector has a significant share in the Turkish economy. In this study, we scraped TripAdvisor reviews of visitors of the Cappadocia region with the Python programming language and used them to analyse public sentiment using various supervised machine learning algorithms. The main purpose of the study is to help create competitive intelligence on both regional and global scales using social media data. For this, we applied Random Forest, Naïve Bayes, and Support Vector Machine methods to classify 4,770 reviews and get insights about the visitors’ perspectives. Results show that the majority of the tourists (90%) had a positive experience during their visit. Most of the complaints focused on the attitudes of staff members. In addition, all three supervised machine learning methods achieved high accuracy in their classification of the reviews. This study is significant in terms of providing a meaningful database for understanding visitor comments, the most important data for the development of tourism in the region, through state-of-the-art machine learning methods, and to direct improvements accordingly.