Measuring the optimal macroeconomic uncertainty index for Turkey

Erdem, Havvanur Feyza; Yamak, Rahmi

doi:10.2298/eka1610007e

Cited by 6 publications

(5 citation statements)

References 10 publications

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“…These results are consistent with those of Fernández-Villaverde et al (2015), Mumtaz and Surico (2018), Kim (2019), Anzuini et al (2020), Saijo (2020) and Ghirelli et al (2021), which have examined the eff ect of FPU on the business cycle based on diff erent countries such as the USA, Italy and Spain. Additionally, these fi ndings are in agreement with Erdem and Yamak (2016), Gürgün (2019), Coşar (2018, 2020), Çevik and Erduman (2020), fi ndings that show the eff ects of economic policy uncertainty on the Turkish economy. Succinctly, the FPU negatively aff ects economies.…”

supporting

confidence: 85%

“…In recent years, there has been an increasing amount of literature on Turkey's economic uncertainty and economic policy uncertainty (Erdem and Yamak, 2016;Gürgün, 2019;Coşar, 2018, 2020;Çevik and Erduman, 2020). However, to the best of our knowledge, our paper is the fi rst attempt to estimate FPU for Turkey and analyse the macroeconomic eff ects of an unexpected FPU shock.…”

Section: Introductionmentioning

confidence: 97%

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Effects of Fiscal Policy Uncertainty on Turkish Economy

Ekinci¹,

Tosunoğlu²

2022

Prague Economic Papers

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Uncertainty is one of the most important issues for economic actors. Uncertainty about tax, expenditure and debt policy has an impact on the economy. The central question in this study asks how fiscal policy uncertainty affects the Turkish economy. First, we quantify Turkey's fiscal policy uncertainty index based on volatility measurements between 1998Q1 and 2020Q4. This index represents major fiscal, economic and political incidents in Turkey. Next, we analyse the effects of fiscal policy uncertainty on the Turkish economy using a VAR model. Our study finds that fiscal policy uncertainty shocks have detrimental and long-lasting effects on the Turkish economy. The results indicated that a positive standard deviation shock in fiscal policy uncertainty decreases the confidence, output and consumption. The findings of this study reveal critical fiscal policy implications for decision-makers. These findings imply that reducing Turkey's fiscal policy uncertainty is a critical policy priority for the business cycle fluctuations.

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supporting

confidence: 85%

Section: Introductionmentioning

confidence: 97%

Effects of Fiscal Policy Uncertainty on Turkish Economy

Ekinci¹,

Tosunoğlu²

2022

Prague Economic Papers

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“…Inflation uncertainty on the other hand is the critical state of not knowing the future direction of inflation. Under this scenario, savers prefer short-term investment; debtors prefer short-term debts, while firms prefer short-term borrowing (Erdem and Yamak 2016).…”

Section: Introductionmentioning

confidence: 99%

The Effect of Inflation Targeting (IT) Policy on the Inflation Uncertainty and Economic Growth in Selected African and European Countries

2022

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The study assessed the effect of inflation targeting (IT) policy on inflation uncertainty and economic growth in African and European IT countries. This study contributes to the existing knowledge by analysing and comparing the African IT and European IT countries using two advanced approaches which include the Generalized Autoregressive Conditional Heteroscedasticity (GARCH) and Panel Vector Autoregressive (PVAR). To determine how the IT policy affects the inflation uncertainty in selected countries, time series techniques were employed. Panel data approaches were used to determine the effect of inflation targeting on economic growth in the selected countries. The results are as follows: (1) Inflation Targeting policy is insignificant in reducing inflation uncertainty in South Africa, and the effect of the policy in Ghana is inconclusive; (2) The IT policy has a significant impact in reducing inflation uncertainty in European countries (i.e., Poland and the Czech Republic); (3) Inflation targeting has a negative impact on economic growth in African Countries; (4) The policy has a positive impact on economic growth in European Countries; (5) In comparison to European countries, the strategy has a negligible impact on economic growth in Africa. Overall, the results suggest that European countries inflation targeting regimes are more credible in terms of reducing the level of inflation uncertainty and sustaining economic growth compared to African countries. In this respect, policymakers must ensure that they assess the economic condition of an individual country before implementing such a policy.

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“…In the literature some studies focus aggregate uncertainty instead of individual uncertainty index. For example, Gan (2014) and Erdem and Yamak (2016) provide an aggregate uncertainty index reflecting the general macroeconomic uncertainty. Similarly, Atta-Mensah (2004) constructs an economic uncertainty index using estimated volatilities by the GARCH model.…”

Section: Measuring Uncertaintymentioning

confidence: 99%

Macroeconomic Uncertainty and Private Investment: The Case of Poland

Güney

2019

Uluslararası İktisadi Ve İdari İncelemeler Dergisi

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Analysis of investment decisions is an important macroeconomic subject due to the role of fluctuations in investments on the economic performance. It is argued that investment models need to take this effect into account if uncertainty has an impact on investment. Therefore, the effects of uncertainty on investments have recently been analyzed in the theoretical and empirical literature. While developing economies face more uncertainty than industrial countries do, most empirical studies consider the uncertainty-investment relationship for developed counties. In this paper, we analyzed the effect of the macro economic uncertainties on private investment in a developing county: Poland. We constructed a generalized autoregressive conditional heteroskedasticity (GARCH) model to measure uncertainties. Then, we employed the bound testing procedure to cointegration analysis. Since our findings indicate a long-term relationship of the variables, we adopt an error correction model to capture the dynamic relationship. Our estimates imply that the real exchange rate, inflation and growth uncertainties effect private investments negatively in Poland. Therefore, we can conclude that macroeconomic stabilization is a necessary condition for the continuity of investments in Poland.

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Measuring the optimal macroeconomic uncertainty index for Turkey

Cited by 6 publications

References 10 publications

Effects of Fiscal Policy Uncertainty on Turkish Economy

Effects of Fiscal Policy Uncertainty on Turkish Economy

The Effect of Inflation Targeting (IT) Policy on the Inflation Uncertainty and Economic Growth in Selected African and European Countries

Macroeconomic Uncertainty and Private Investment: The Case of Poland

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