Regional disparity is one of the important characteristics of the Turkish economy. This study examines the impact of market potential on the regional differences in Turkey by investigating wages in the manufacturing industry for 1987 and 2000. Evidence suggests that market potential is an important determinant of inequality in Turkey. In addition, public–private decomposition reshapes the dispersion of wages supportive of rising heterogeneity in the private manufacturing industry. This increases the explanatory power of market potential, which is observed to be high in western Turkey and diminishes toward eastern Turkey. Our findings highlight that during the postliberalization era of the 1980s, Turkey's regional inequality concern transformed into a structural problem which can be explained by provincial market potential. Moreover, our results underline that the modern geography framework, which has been tested for developed economies, is able to elucidate the regional differences in a developing country suffering from persistent imbalances.

Given the pro-cyclicality of the financial cycles on the business cycles, it is of importance to analyze whether the use of the traditional monetary policy instruments along with the prudential responsibilities result in the prevention of unsustainable financial cycles e.g., housing cycles. Still, there is not enough empirical evidence regarding the exploration of the nexus between housing variables and monetarymacroprudential policy rules. Observing the developments in housing market in Turkey, that is, the simultaneous increase in both house prices and residential investments in the last decade, the nexus between housing market and macro economy deserves a further investigation. Accordingly, a new Keynesian DSGE model is estimated with Turkish data for a period 2010-2014 using Bayesian techniques in this thesis. Results reveal that arguments for a monetary policy regime that produces aggregate price stability will, as a byproduct, tend to promote stability of housing markets don't fully hold in the estimation. It can also be stated that the monetary policy rules with existing prudential policy instruments may not result in prevention of further housing "bubbles". The Variance-shock decomposition analyses show that demand and supply shocks dramatically determine the cycles of the real housing prices and residential investment whereas the monetary policy shocks and shocks in central bank's inflation target do not explain the volatility of the housing variables. iii GENEL BİLGİLER

Theoretical models and empirical studies focus on, in general, local characteristics such as centripetal or centrifugal forces to explain regional differences in economic activities. However, how the technological characteristics of the economic activities affect the location choice are critical issues. The paper defines four types of industries based on the relation between regional distribution and selected technology indicators to explore the changes in industrial structure of the regions over the periods before and after 2008. The findings reveal that, in spite of the short period covered, it is possible to observe some changes using the industry types we defined.

Turkey recently launched a set of structural reforms to address elimination of producer price subsidies in its agriculture, and replacing them with a targeted direct income transfer program. The paper investigates analytically viable options of the proposed agricultural-cum-fiscal reform and analyzes the formal links between the public sector fiscal balances, accumulation patterns, dynamic resource allocation, and consumer welfare under a medium-long-term horizon. We utilize a dynamic general equilibrium model. The model results suggest that even though there are expected modest welfare gains of consumers' intertemporal efficiency, the repercussions of these policies on the rural economy and aggregate gross domestic product are likely to be deflationary.

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This paper investigates causality relations among exports, foreign direct investment and economic growth in Sub-Saharan Africa. A new panel-data causality testing approach is developed in the article, which is based on Bayesian estimation of Seemingly Unrelated Regression (SUR) systems. The study covers the period between 1970 and 2017 and tests for both unidirectional and bidirectional causality relations for a group of 13 Sub-Saharan African countries. Findings suggest a direct, one-period-ahead, unidirectional causality from exports to GDP growth in Burkina Faso, Madagascar, Nigeria, Rwanda, Senegal and Sierra Leone. Test results provide evidence of growth-led exports in Benin, Democratic Republic of the Congo, Kenya and Niger. This study also provides valuable insights into causality relations between FDI and economic growth, and exports and FDI pairs.

There is no a unique agreement regarding the impact of trade openness and financial openness on growth volatility. We carried out an empirical investigation using system GMM to assess the impact of openness on growth volatility in Sub-Saharan African. The analysis considered a panel of 29 countries from 1981 to 2010. According to our results, contrary to earlier findings, both trade and financial openness significantly reduce growth volatility in Sub-Saharan Africa. However, financial openness isn't found to be robust for different specifications. We further decomposed trade and financial openness. Trade in 'manufacturing goods' significantly reduce volatility in comparison to trade in 'nonmanufacturing goods'. A further decomposition of financial openness into FDI and portfolio flows does not reveal a significant effect on growth volatility.

After almost five decades of industrialization—characterized, on the one hand, by considerable state intervention and, on the other, by protectionist import-substituting policies in domestic capital formation—in the early 1980s Turkey ostensibly entered a new era of export-led economic growth. Since 1960, the Turkish democracy has experienced a series of crises with astonishingly regular ten-year cycles of recurrence. The 1980 military intervention, however, brought about a radical attempt to restructure the economy, hardly comparable with the rather gradual changes in its recent economic history. Its ten years of experimentation with economic liberalization and structural adjustment provide us today with an adequate record to identify and discuss at least the salient features of this period by comparing the performance of the economy in different years.