This study examines the interaction between house prices and government spending, mortgage interest rates, and gross domestic product in Turkey. The ARDL bounds test approach is applied to quarterly data covering the 2010:1-2017:4 period. Findings indicate that there is a statistically significant long-run and shortrun cointegration between the two house price indexes and government spending, mortgage rates, and GDP. An increase in government spending has a statistically significant positive effect on house prices. The study also indicates that mortgage interest rate and GDP have a statistically significant effect on house prices.

Abstract:In recent years, there has been extensive research on the conduct of monetary policy in small open economies that are subject to inflation and output fluctuations. Policymakers should decide whether to implement strict inflation targeting or to respond to the changes in output fluctuations while conducting monetary policy rule. This study aims to examine the response of alternative monetary policy rules to Turkish economy by means of a DSGE model that is subject to demand and technology shocks. The New Keynesian model we used is borrowed from Gali (2015) and calibrated for the Turkish economy. Welfare effects of alternative Taylor rules are evaluated under different specifications of central bank loss function. One of the main findings of this paper is that in the case of a technology shock, strict inflation targeting rules provide the minimum welfare loss under all loss function configurations. On the contrary, the losses are weakened if the monetary authority responds to output fluctuations in the presence of a demand shock. Finally, there exists a trade-off between the volatility of output and inflation in case of a technology shock, while the volatility of both variables moves in the same direction in response to a demand shock.

Purpose The purpose of this study is to examine the impact of tourism activities on house prices in Turkey from January 2010 to March 2020. Design/methodology/approach It is used newly developed cointegration and causality tests based on Fourier approximation. These methods consider smooth structural breaks and do not need to recognize a priori date number and/or form of breaks. Findings Empirical findings show that international tourism activities have a substantial role in the escalation of house prices in Turkey. Findings also indicate a rise in industrial production enhances house prices while the mortgage lending rate exhibits a negative influence on house prices. Additionally, the evidence from Fourier causality tests reveals the unilateral causal linkage from tourism to house prices. This situation also shows that the tourism sector has a substantial role in stabilizing house prices’ rapid rise as a policy implication. Originality/value Although a large number of papers have been analyzing the link between house prices and macroeconomic variables, this study eliminates the lack of papers examining the link between tourism and house prices in Turkey by using the new cointegration and causality methods that consider smooth structural changes.

Abstract. The aim of this paper is to examine the dynamic relationship between consumption, investment and unemployment in

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