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Transmission and impact of stock market shocks on the world economy Central Bank Review Pub Date : 2024-03-11 Luccas Assis Attílio
In this study, we examine stock market shocks using a Global Vector Autoregressive (GVAR) model encompassing 26 countries from January 1999 to June 2022. Our findings reveal that i) shocks originating from advanced economies (AD) exhibit greater persistence in generating fluctuations compared to shocks from emerging market economies (EME); ii) negative stock market shocks are associated with devaluations
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“Banking systems in the euro zone and transmission of monetary policy” Central Bank Review Pub Date : 2024-02-03 José Alejandro Fernández Fernández
This study examines the transmission of monetary policy in the eurozone from 2005 to 2021. The novelty of this research lies in defining the European Central Bank's monetary policy through three dimensions extracted via principal component analysis. These components, examined across various neural network models, enable the exploration of the heterogeneity of monetary policy within the Eurozone. Specifically
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Economic sentiment and foreign portfolio flows: Evidence from Türkiye Central Bank Review Pub Date : 2024-01-16 Didem Güneş, İbrahim Özkan, Lütfi Erden
The notable surge in capital flows in recent years has emerged as a key factor shaping the dynamics of international financial markets and influencing economic performance of emerging economies. Even though macroeconomic fundamentals of an economy can explain some of the patterns in international capital flows, behavioral factors also seem to be essential for positioning capital flows across countries
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The impact of domestic and global factors on individual public, domestic and foreign bank performances in Türkiye Central Bank Review Pub Date : 2023-12-17 Serkan Çiçek, Aynur Yıldırım
The Turkish economy has encountered significant shocks in interest rates and foreign exchange along with global risks in recent years. These shocks had an impact not only on the real sector but also on the banking sector's returns, depending on the ownership structure. This study examines the sensitivity of banking sector stock returns to the exchange rate, interest rate, and VIX index using data from
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Long shadows of the walking dead on economic activity Central Bank Review Pub Date : 2023-12-07 N. Nergiz Dincer, Pelin Pektekin, Ayça Tekin-Koru
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
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Household portfolios in Türkiye: Results from the household finance and consumption survey Central Bank Review Pub Date : 2023-11-30 Evren Ceritoğlu, Seyit Mümin Cılasun, Müşerref Küçükbayrak, Özlem Sevinç
This paper analyzes the distribution of household portfolios in Türkiye using a fresh data set, the Central Bank of the Republic of Türkiye – Household Finance and Consumption Survey. The empirical analysis concentrates on the motives behind household saving preferences and the distribution of household portfolios. Moreover, the financial situation of households in Türkiye is compared with Euro area
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Financial literacy and cash holdings in Türkiye Central Bank Review Pub Date : 2023-10-27 Mustafa Recep Bilici, Saygın Çevik
This paper examines the effect of financial literacy level on cash holdings in Turkey. Utilizing the Methods of Payment Survey, which includes both financial literacy and cash-related data, we first investigate the fundamentals of financial literacy in Turkey. Based on the performance on financial literacy questions, we categorize respondents into three groups. Subsequently, we analyze how cash holding
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A comparative analysis of the financial performance of commercial banks after mergers and acquisitions using Nepalese data Central Bank Review Pub Date : 2023-10-14 Baburam Adhikari, Marie Kavanagh, Bonnie Hampson
This article investigates consolidation and restructuring in the banking sector in Nepal that was induced by regulatory intervention in recent years. We compare the financial performance of the overall commercial banking sector and selected commercial banks on an individual basis before and after the mergers and acquisitions (M&A) policy intervention. The research employs an analysis of the financial
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Heterogeneous effect of exchange rates on firms’ exports: Role of labor intensity Central Bank Review Pub Date : 2023-09-28 Kurmaş Akdoğan, Yusuf Kenan Bağır, Huzeyfe Torun
Using an extensive firm-level database that combines balance sheet information, social security registry and customs data, we examine whether the relationship between the exchange rate and exports change with the degree of labor-intensity of production. The results based on manufacturing firms in Türkiye suggest that the sensitivity of labor-intensive firms to the exchange rate is higher than that
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Credit growth and current account balance Central Bank Review Pub Date : 2023-09-30 Aysu Çelgin, Okan Eren, Pınar Özlü
In this paper, we investigate the relationship between different loan types and the current account balance along with its sub-components. Our empirical results suggest that a rise in total loans inevitably leads to a deterioration in the current account balance. This relationship is preserved in the case of the goods trade balance, but it becomes statistically insignificant and disappears if the services
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Anticipation of central banks' adoption of inflation targeting and its effect on inflation Central Bank Review Pub Date : 2023-06-28 Amlendu Dubey, Akanksha Mishra
We construct an empirical test of whether the anticipation of adoption of inflation targeting affects the inflation rate. We observe that most of the central banks adopt the regime after first achieving significant disinflation. With pre-inflation-targeting-disinflation, initial targets are met with success and the new regime gains credibility. Working with data for 114 emerging market, advanced and
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Household debt, heterogeneity and financial stability: Evidence from Kazakhstan Central Bank Review Pub Date : 2023-06-27 Alisher Aldashev, Birzhan Batkeyev
Using a Monte Carlo method and quarterly data from the 2019 Household Expenditure and Income Survey, we examine the resilience of urban and rural households to various shocks, including exchange rate change, changes in asset prices, job losses, and decline in income. Based on the exposure at default (EAD) estimates, the largest impact was observed in the case of an income shock. The EAD values ranged
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Compliance with the Basel Core Principles and supervisory structure: A cross-country analysis Central Bank Review Pub Date : 2023-06-27 Maria Teresa Medeiros Garcia, Frederico Cavaleiro de Mendonça
This paper is motivated by the implementation of the new banking supervision structure in the European Union (EU) and the possible conflict of interest between monetary policy and the supervision authority within the European Central Bank (ECB). The empirical analysis considers the relationship between the structure of banking supervision and the compliance with the Basel Core Principles (BCP) for
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The determinants of savings rates in OECD countries: The role of private pensions Central Bank Review Pub Date : 2023-03-29 Pınar Fulya Gebeşoğlu, Hasan Murat Ertuğrul, Ümit Bulut
The design of pension schemes is crucial in determining savings behavior. The impact of pension schemes on saving rates across countries remains to be an intriguing empirical question considering the complicated nature of the relationship between saving patterns and pension wealth. This paper investigates the effect of the private pension contributions on savings rates in 25 selected OECD countries
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Market concentration and producer prices Central Bank Review Pub Date : 2023-03-11 Huzeyfe Torun, Ahmet Duhan Yassa
This study investigates the role of sectoral market structure in the inflationary dynamics of the domestic producer prices (D-PPI) in Türkiye. We start by reporting the fact that industries with intense competition had lower producer price inflation compared to industries with low-competition in the past few years. Further investigation shows that this differentiation across industries corresponds
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Inflation, perception of economic uncertainty and COVID-19: Evidence from Central Bank communication Central Bank Review Pub Date : 2023-03-01 Pierre Hítalo Nascimento Silva, Jevuks Matheus de Araújo
Do extreme events have a significant effect about textual sentiment? The purpose of this article is to highlight the need to correct the estimation of indicators of economic uncertainty. The indicators were constructed from textual data about the perspective of extreme events. For this purpose, based on data extracted from the minutes of mee-tings of the Monetary Policy of eighteen Central Banks, we
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Modeling and estimation of synchronization in size-sorted portfolio returns Central Bank Review Pub Date : 2022-12-08 Cem Çakmaklı, Richard Paap, Dick van Dijk
This paper examines the lead/lag relations between size-sorted portfolio returns through the lens of financial cycles governing these returns using a novel econometric methodology. Specifically, we develop a Markov-switching vector autoregressive model that allows for imperfect synchronization of cyclical regimes such as bull and bear market regimes in US large-, mid- and small-cap portfolio returns
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Network structure of Turkish interbank market Central Bank Review Pub Date : 2022-12-01 Tuba Pelin Sümer, Süheyla Özyıldırım
Global financial crisis has shown the importance of understanding the structure of interbank relations. In this study, we investigate the network relations based on interbank exposures in Türkiye. We estimate several network statistics and document how the network relations have changed over the time period of 2002–2021. We find that the network structures vary substantially by financial instruments
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Does exporting create employment? Evidence from Turkish manufacturing Central Bank Review Pub Date : 2022-11-26 Mustafa Özsarı, Yılmaz Kılıçaslan, Ünal Töngür
The aim of this study is to analyze the impact of exporting on labor demand in Turkish manufacturing industry. By using Generalized Methods of Moments (GMM) with the firm-level production and trade data of Turkish manufacturing industry, this paper is exploring the employment impact of international trade. The analysis is based on firm level data obtained from Turkish Statistical Institute (TURKSTAT)
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Bootstrap-DEA management efficiency and early prediction of bank failure: Evidence from 2008-2009 U.S. bank failures Central Bank Review Pub Date : 2022-09-06 Abdus Samad, Vaughn S. Armstrong
This paper examines prediction of U.S. bank failure with a probit model that uses bias-corrected technical efficiency estimated using bootstrap data envelopment analysis as the measure of management quality. The model is tested on a sample of failed and non-failed banks during the sub-prime mortgage meltdown, 2008–2009. Results demonstrate this measure of management efficiency, together with other
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Is bank risk appetite relevant to bank default in times of Covid-19? Central Bank Review Pub Date : 2022-09-06 Pei-Ling Lee, Chun-Teck Lye, Chin Lee
The paper aims to analyze the effect of bank risk appetite on banks' default probabilities during the year of COVID-19 in 12 countries while controlling for bank-specific and country-specific effects over time. A System Generalized Methods of Moments (GMM) model of default probabilities is estimated over the periods 2010–2021. This study confirms the ‘risk-mitigation view’, in which banks with higher
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Covid-19, sovereign risk and monetary policy: Evidence from the European Monetary Union Central Bank Review Pub Date : 2022-08-30 Seçil Yıldırım Karaman
This paper investigates the impact of Covid-19 pandemic and monetary policy measures adopted by the European Central Bank (ECB) on the sovereign risk for the European Monetary Union (EMU) countries for the period between March-2020 and November-2020 using daily data. The impact of Covid-19 and monetary policy shocks on the credit default swap rates and bond yields are investigated relying on a fixed
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How can a central bank exit quantitative easing without rapidly shrinking its balance sheet? Central Bank Review Pub Date : 2022-06-09 Atsushi Tanaka
An important question for the major central banks of the industrialized world is how to design desirable strategies to exit quantitative easing (QE). At the exit, if a central bank needs to reduce rapidly the liquidity created by its balance sheet expansion, issuing new interest-bearing liabilities would be preferable to rapidly shrinking the balance sheet by selling existing assets, both for the stability
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Exchange rate volatility and export in Turkey: Does the nexus vary across the type of commodity? Central Bank Review Pub Date : 2022-06-09 Doğukan Tarakçı, Fevzi Ölmez, Dilek Durusu-Çiftçi
Turkey has experienced a rapid increase in exports during the last two decades. In addition, there has been a significant increase in the exchange rate and its volatility in recent years. Hence, the empirical examination of the volatility-export nexus in a comprehensive framework seems to be important to provide insights for policymakers. In this study, we investigate how the exchange rate volatility
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Factors determining the location decision: Analysis of location choice preferences of the ICI-1000 companies with the nested logit model Central Bank Review Pub Date : 2022-04-07 Büşra Akın, Ümit K. Seyfettinoğlu
The aim of this study is to analyze the location decisions of the manufacturing industry companies in the ICI Top 500 and Second Top 500 Industrial Enterprises (ICI-1000) for the year 2018. The location choice model developed accordingly is based on the assumption that companies choose the location of their production facilities with “the goal of profit maximization, and that this decision is influenced
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Analysis of the impacts of safeguard actions: Evidence from Turkey Central Bank Review Pub Date : 2022-04-07 Volkan Sezgin
This article analyses Turkey's safeguard (SG) actions using a renovated approach to the measurement of the impacts of the SG duties with empirical application introduced by Bown and McCulloch (2004). We examine the trade impacts of 16 safeguard duties, covering 52 different 4 and 6-digit Harmonized System (HS) product categories, implemented by Turkey between 2003 and 2013, and we aim to reveal whether
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Potential growth in Turkey: Sources and trends Central Bank Review Pub Date : 2022-02-09 Orhun Sevinç, Ufuk Demiroğlu, Emre Çakır, E. Meltem Baştan
This paper estimates potential growth in Turkey using a production function estimation approach. Our approach aims to measure the inputs of production in the most detailed fashion that is possible and empirically addresses concepts of sustainable potential growth for Turkey. While developing measures of the sources of potential growth, we provide a thorough discussion of the estimated trends in labor
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Consumer loan rate dispersion and the role of competition: Evidence from Turkish banking industry Central Bank Review Pub Date : 2022-01-19 Selva Bahar Baziki, Yavuz Kılıç, Muhammed Hasan Yılmaz
This paper investigates the degree of dispersion in the loan pricing of commercial banks and its association with competitive conditions in the banking industry of a large emerging economy. To quantify the lending rate variability in consumer loans, we utilize a new indexation mechanism exploiting a detailed bank-level dataset for the period January 2007–April 2020. With panel convergence methods,
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The impacts of international capital flows on household credits Central Bank Review Pub Date : 2021-12-09 Bilal Çayır
This paper investigates the association between international capital flows (foreign direct investment and portfolio investments) and household credits using quarterly data for Turkey from 2005 to 2020. The Turkish financial market is a suitable sample due to Turkey's highly open economic structure to global markets and because of the country's strong demand dynamics. This study also employs a set
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Can central bank speeches predict financial market turbulence? Evidence from an adaptive NLP sentiment index analysis using XGBoost machine learning technique Central Bank Review Pub Date : 2021-12-13 Anastasios Petropoulos, Vasilis Siakoulis
Central Bank speeches usually function as aggregators of internal quantitative and qualitative analysis of the institutions regarding the macro economy, the monetary policy and the health of the financial systems. Speeches usually function as a summary of the current status of a countries economic health, the undergoing trends and some future perspectives of the global economy. In this study departing
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Covid 19 and the Turkish labor market: Heterogeneous effects across demographic groups Central Bank Review Pub Date : 2021-12-07 Altan Aldan, Muhammet Enes Çıraklı, Huzeyfe Torun
The aim of this paper is to detect the effects of the Covid-19 pandemic on several labor market indicators and to identify the heterogeneity of these effects across different demographic groups in the Turkish labor market. To this aim, we use the quarterly Turkish household labor force surveys which cover the period between 2005 and 2020. We find that pandemic decreased employment and labor force participation
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Liquidity transformation, collateral assets and counterparties Central Bank Review Pub Date : 2021-10-06 Calebe de Roure, Nick McLaren
We investigate if the Bank of England's liquidity facilities encourage some counterparties to participate more than others and if the use of some collateral assets is promoted more than others. Between 2010 and 2016, there was regular usage of two facilities: Indexed Long-Term Repos (ILTR) and the Funding for Lending Scheme (FLS). We show that participation in ILTR is consistent with safe counterparties
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Card spending dynamics in Turkey during the COVID-19 pandemic Central Bank Review Pub Date : 2021-07-30 Zeynep Kantur, Gülserim Özcan
This paper provides an extensive analysis of card spending during the COVID-19 pandemic in Turkey by using weekly aggregated and sectoral credit and debit card spending data from March 2014 to December 2020. At an aggregated level, we show that aggregate demand decreases significantly at the early stages of COVID-19 and seems to reinstate its pre-COVID trend. However, when we include the pre-existing
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Heterogeneous provincial prices and monetary policy in South Africa: A wavelet-based quantile regression analysis Central Bank Review Pub Date : 2021-08-19 Abdul-Aziz Iddrisu, Imhotep Paul Alagidede
Although economic agents in different parts of a country face heterogeneous prices, empirical literature continue to assume homogeneity in the monetary policy-inflation nexus, with dire consequences for optimal monetary policy and welfare. Using wavelet-based quantile regressions, we provide a multi-layered asymmetric exposition on provincial inflation-monetary policy relationship in South Africa.
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Domestic demand and exports: Evidence from Turkish firms Central Bank Review Pub Date : 2021-07-28 Selçuk Gül
This study examines the relationship between real domestic sales and real exports for Turkish manufacturing firms. Dynamic panel data estimations based on firm-level data for the period 2004–2014 suggest that the two variables are substitutes. Other factors held constant, we estimate that a 10 percent decline in real domestic sales is associated with around 2.7 percent increase in real exports, on
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Hidden reserves as an alternative channel of firm finance Central Bank Review Pub Date : 2021-05-13 İbrahim Yarba
This study analyses the argument that whether Turkish non-financial firms utilize any informal source of alternative funding during economic uncertainties over the last decade. This study is the first to explore the issue and provide some insights regarding how small and medium-sized enterprises do react to the financial constraint problem in such an economic environment. Both trend analysis and empirical
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A measure of Turkey's sovereign and banking sector credit risk: Asset swap spreads Central Bank Review Pub Date : 2021-05-26 Doruk Küçüksaraç, Abdullah Kazdal, Halil İbrahim Korkmaz, Yiğit Onay
The existence of the credit derivatives written on the eurobonds such as credit default swaps or asset swaps allows policymakers and investors to monitor the evolvement of credit risk. However, these instruments are mostly available in advanced economies, whereas the market for credit derivatives in emerging market countries, including Turkey, is limited in terms of liquidity and maturity. In this
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Okun’s law under the demographic dynamics of the Turkish labor market Central Bank Review Pub Date : 2021-03-18 Evren Erdoğan Coşar, Ayşe Arzu Yavuz
This study examines the asymmetric relationships between demographic characteristics of labor market variables and Gross Domestic Product (GDP) in the Turkish economy. Both expansions and recessions are considered in a Markov Switching (MS) model, using quarterly data between 1989 and 2019. Okun’s coefficients are estimated for the different age groups, genders and education levels. The results reveal
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The new investment landscape: Equity crowdfunding Central Bank Review Pub Date : 2021-02-10 Burze Yasar
Equity crowdfunding has emerged as a new landscape for financing ideas and innovations. While a number of countries has come a long way and developed equity crowdfunding platforms, a number of countries is taking it more slowly. This paper reviews how equity crowdfunding platforms function, the regulatory approaches around the world and academic contributions on signaling, success factors and social
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Term premium in emerging market sovereign yields: Role of common and country specific factors Central Bank Review Pub Date : 2020-12-01 İbrahim Özbek, İrem Talaslı
Abstract This paper provides cross-country analysis of local bond market term premia in emerging countries. In order to investigate the role of domestic and global factors in the determination of compensation demanded by investors for their medium and long term fixed income investments, term premia is computed for emerging countries by using methodology adopted in Adrian et al. (2013) . It is found
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Modelling central bank behaviour in Nigeria:A Markov-switching approach Central Bank Review Pub Date : 2020-12-01 Taofeek Olusola Ayinde, Abiodun S. Bankole, Oluwatosin Adeniyi
Abstract The study models the behaviour of the Central Bank of Nigeria. An extended Taylor’s framework that accounted for exchange rate dynamics and political risk factors was adopted. In order to capture both ex-ante and ex-post behaviours of the monetary authority in the country, Markov-Switching Dynamic Regression (MSDR) approach was employed. The period of investigation spanned 1981q1 – 2017q4
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The asymmetric J-curve phenomenon: Kenya versus her trading partners Central Bank Review Pub Date : 2020-12-01 Moses Mutharime Mwito, Beatrice K. Mkenda, Eliab Luvanda
Abstract This paper examines asymmetries in the J-curve effects of real exchange rates on Kenya’s trade balance by using panel data for bilateral trade with 30 trading partners. The data covers the period from 2006q1 to 2018q4 and the Pooled Mean Group (PMG) estimation technique, under both the linear and nonlinear ARDL frameworks, is applied. This paper departs from previous studies by using a modified
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Revisiting interest rate and lending channels of monetary policy transmission in the light of theoretical prescriptions Central Bank Review Pub Date : 2020-12-01 Abdul-Aziz Iddrisu, Imhotep Paul Alagidede
Abstract Although theories on channels of monetary policy transmission emphasize indirect monetary policy effect on inflation and output, empirical literature is surprisingly rooted in a direct approach. The use of variants of vector autoregression, with theoretical ordering of variables, does not only fail to quantify the indirect effect, but are also fraught with disagreements on identification of
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Interaction of monetary and fiscal policies in Turkey Central Bank Review Pub Date : 2020-12-01 Tayyar Büyükbaşaran, Cem Çebi, Erdal Yılmaz
This paper aims to investigate the interaction between monetary and fiscal policies in Turkey. For this purpose, a Bayesian Structural Vector Auto-Regression (SVAR) model with sign and zero restrictions is used. We particularly focus on how the fiscal and monetary policy variables respond to various macroeconomic shocks and whether the type of shocks matters. Our results confirm the importance of nature
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Import Content of Turkish Production and Exports: A sectoral analysis Central Bank Review Pub Date : 2020-12-01 Yasemin Erduman, Okan Eren, Selçuk Gül
This study investigates the evolution of the import content of production and exports in Turkey for the 2002–2018 period. Based on 2002 and 2012 input-output tables and a large data set of production and foreign trade, we estimate the production and imported input use for 20 sectors, mainly from the manufacturing industry. We calculate import requirement ratios, comprising both direct and indirect
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Exchange-traded funds and FX volatility: Evidence from Turkey Central Bank Review Pub Date : 2020-12-01 Burçhan Sakarya, Aykut Ekinci
Abstract Exchange-Traded Funds (ETFs) have become one of the most popular passive investment instruments since they bring together the advantages of stocks and mutual funds. As passive investors are more risk averse and sensitive to possible adverse market developments, ETF’s fund flows can provide distinct information in certain periods in comparison with active funds. This study looks at ETF fund
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Credit decomposition and economic activity in Turkey: A wavelet-based approach Central Bank Review Pub Date : 2020-09-01 Oğuzhan Çepni, Yavuz Selim Hacıhasanoğlu, Muhammed Hasan Yılmaz
This paper aims to investigate the co-movement between credit growth and gross domestic product (GDP) growth in Turkey over the period January 2004–October 2019. By taking into account alternative credit decomposition and the variations over time and across different frequencies using the wavelet analysis, the results show that: i) GDP growth highly synchronizes with credit growth compared to other
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Logistics performance and export variety: Evidence from Turkey Central Bank Review Pub Date : 2020-09-01 Ünal Töngür, Kemal Türkcan, Seda Ekmen-Özçelik
Abstract This study examines the effects of logistics infrastructure on export variety, as measured by the extensive margin. Using finely disaggregated exports data for Turkey’s trade with 174 countries over the period 2007–2017, we decompose gross export flows into the extensive and intensive margins of Turkish exports utilizing the method developed by Hummels and Klenow (2005). Gravity estimates
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Monetary policy and financial stability: Should central bank lean against the wind? Central Bank Review Pub Date : 2020-09-01 Aswathi R. Nair, B. Anand
Abstract After the global financial crisis, it was observed that price stability alone would not ensure financial stability. The new paradigm indeed insists on the inclusion of financial stability as an additional macroeconomic objective. In this context, it is essential to understand how exactly is the new objective of financial stability will be placed in the existing framework. Also, the efficacy
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Job search, occupational choice and learning Central Bank Review Pub Date : 2020-09-01 Tayyar Büyükbaşaran
Abstract This paper investigates the labor market consequences of incomplete information about workers’ own job searching process and best occupations fitting to them. A search and learning model is provided in order to analyze these effects. In the model, search outcomes relay information about workers’ job finding abilities and appropriate occupations suited to them, and workers use this information
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How do fund rates affect the U.S. firms? A threshold estimation Central Bank Review Pub Date : 2020-06-01 Mina Sami, Tarek Ibrahim Eldomiaty, Mina Kamal
Abstract Purpose The financing of growth of the firm is quite sensitive to fluctuations in Fund rates. This requires a treatment of Fund rates being subject to structural shifts. This paper examines the impact of threshold Federal Fund Rate (FFR), being a proxy for Federal Reserve policy, on different dimensions of growth of the US firm. The goal is to examine the extent to which shifts in FFR cause
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Spillover effect in financial markets in Turkey Central Bank Review Pub Date : 2020-06-01 Buket Alkan, Serkan Çiçek
Abstract An increase in the return of an asset in the financial markets may cause the returns of the remaining assets to fluctuate over time because of the arbitrage conditions. This may also create a spillover or contagion between the volatilities of the assets in the financial markets. This study aimed to capture the spillover between financial markets in the Turkish economy and to investigate the
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Uncertainty, macroprudential policies and corporate leverage: Firm-level evidence Central Bank Review Pub Date : 2020-06-01 Ibrahim Yarba, Z. Nuray Güner
Abstract This paper investigates the impact of macroprudential policies and uncertainty of economic environment on corporate leverage dynamics over the last decade. This is the first study to investigate the impact of macroprudential policies and uncertainty on leverage dynamics of Turkish non-financial firms using firm-level data. We argue in this paper that persistence of uncertainty should be a
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The determinants of bank profitability: A cross-country analysis Central Bank Review Pub Date : 2020-06-01 Tu DQ. Le, Thanh Ngo
Abstract This study investigates the determinants of bank profitability in 23 countries from 2002 to 2016 using the system generalized method of moments. The findings indicate that the number of bank cards issued, the number of automated teller machines (ATMs) and the number of point of sale (POS) terminals can improve bank profitability. Hence, this suggests a need for further expansion of these delivery
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Oil price shocks and the composition of current account balance Central Bank Review Pub Date : 2020-03-01 Serdar Varlik, M. Hakan Berument
Abstract It is a well-established regularity that permanent oil price shocks do not have a permanent effect on the current account deficit. This requires that sub-components of the current account or trade balance will make the necessary adjustments to accommodate the higher energy bill of a country triggered by permanent crude oil price increases. Empirical evidence gathered from Turkey reveals that
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Structural transformation in the presence of trade and financial integration in sub–Saharan Africa Central Bank Review Pub Date : 2020-03-01 Imhotep Paul Alagidede, Muazu Ibrahim, Yakubu Awudu Sare
Abstract This study examines the impact of trade and financial integration on structural transformation relying on data from 28 countries in sub-Saharan Africa (SSA) over the period 1985–2015. Results from our system generalized method of moments (GMM) show that, trade and financial integration significantly spur manufacturing and agricultural sector value additions. However, for the industrial sector
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Market-based monetary policy expectations for Turkey Central Bank Review Pub Date : 2020-03-01 Fatih Akçelik, Anıl Talaslı
Abstract This study discusses various types of market-based instruments and tries to find which financial instrument is the best in predicting monetary policy expectations for different time horizons in Turkey. Consistent with the existing literature on this subject, we adopt an approach that comes from expectations theory of term structure of interest rates, which implies that short term forward interest
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Imported inputs and the countercyclicality of net exports in emerging markets Central Bank Review Pub Date : 2019-12-01 S. Tolga Tiryaki
Using a single-sector small open economy real business cycle model with variable capital utilization, imported inputs, and working capital constraint, I show that strong countercyclicality of net exports observed in emerging market economies is to a large extent due to the technology in which production relies on imported inputs. The easier domestic inputs can be substituted for imported inputs, the
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Labour market fluctuations: An RBC model for emerging countries Central Bank Review Pub Date : 2019-12-01 Sevgi Coşkun
Abstract In this paper, we examine the labour market properties of business cycle fluctuations for a group of 15 emerging market economies (EMEs) and the US using annual data from 1970 to 2013. We find that on average, the hours worked and employment volatility (relative to output volatility) are lower, while the volatility of productivity and wages are 2–3 times higher in EMEs compared to the US.