Eurasian energy prospects and politics : Need for a longer-term western strategy

The Eurasian world around the Caspian Sea is likely to become an important oil and natural gas producer. This region is a gateway to three regions that are of great strategic importance to the West: to the east lies China and the rest of Asia; to the south lies Iran, Afghanistan, and the Islamic world; to the west and north lies Russia, Turkey and Europe. This is a region much larger than Western Europe. Future developments in Eurasia will therefore affect fundamentally not only the security of Western energy supplies, but also the traditional geopolitical equation in that part of the globe. The West needs to address current problems there as well as to pursue a proactive policy of conflict prevention. The European Union already imports half of its primary energy requirements, which will increase to 75% by the year 2020. Mutually rewarding energy cooperation offers the best means for integrating this region into the world family of market democracies. Turkey, a reassuringly Western ally, stands well positioned geographically, politically and economically to act as an energy ‘bridge’ between Eurasia and the West.     

Reconsideration of Economic Views of a Classical Empire and a Nation-State During the Mercantilist Ages

While the main aim of the economic policies of European nation-states was to use the power of the state to promote trade and economic growth and to build up national industries and manufacture, the Ottoman Empire continued to follow its provisionist, fiscalist, and traditional economic policies of land expansion in the early modern period. In Western Europe, this experience gave birth to a new class that gradually improved its trade ability and expanding industries and markets under a capitalist system. The Ottoman imperial policy was mostly concerned about the continuity of strong central authority and land expansion, which never meant improving the industry or trade concerns. Instead, the economic policies of the Ottomans were subsistence of the people, provisioning the major population centers, collection of taxes, and maintaining freedom of trade. The balance and stability in society explain the priority for the Ottomans in the economy. However, commercialization and profit explain the priority for the Dutch nation in the economy. This article elaborates the economic views of the Dutch Republic and the Ottoman Empire in the mercantilist ages.     

Distinguishing between stochastic and deterministic behavior in high frequency foreign exchange rate returns: Can non-linear dynamics help forecasting?

This paper investigates the dynamic properties of high frequency foreign exchange rate returns. Using hourly data for four exchanges rates, the British Pound, the Deutschemark, the Japanese Yen and Swiss Franc, we attempt to differentiate between stochastic and deterministic behavior in hourly rates of returns. While the autocorrelation coefficients and the Brock-Dechert-Scheinkman test point to the presence of some non-linear dependence, correlation dimension estimates reveal little evidence in favor of low-dimensional chaos. The analysis appears to support the view that although it is not possible to exploit deterministic non-linear dependence in exchange rate time series in order to improve short-term forecasting, non-linear stochastic models can be used for conditional volatility forecasts.     

Can we obtain realistic parameter estimates for the ‘protection for sale’ model?

Abstract.  In the Grossman and Helpman (1994) model of endogenous trade protection, sectoral lobbies try to influence an incumbent government that maximizes a weighted sum of political contributions and aggregate welfare. We empirically investigate this model using U.S. and Turkish data. Our specification is more tightly tied to theory than those in existing studies. Additionally, we assume all specific‐factor owners to be organized into different lobbies. These changes, validated by hypothesis tests, yield more realistic parameter estimates of the government's concern for aggregate welfare and of the fraction of population organized into lobbies.     

Engines of Liberation

Electricity was born at the dawn of the last century. Households were inundated with a flood of new consumer durables. What was the impact of this consumer durable goods revolution? It is argued here that the consumer goods revolution was conducive to liberating women from the home. To analyse this hypothesis, a Beckerian model of household production is developed. Households must decide whether or not to adopt the new technologies, and whether a married woman should work. Can such a model help to explain the rise in married female labour-force participation that occurred in the last century? Yes.     

On Creating and Claiming Value in Negotiations

This paper presents a negotiation model that includes value creation. It shows that creative negotiation efforts tend to intensify toward the deadline, and that the deadline is determined endogenously by the tension between two motives, creating more value and claiming from existing value. When the parties can present misleading offers in order to claim rather than create value, the outcome in early negotiation rounds may display an impasse where any proposal is rejected without inspection, while negotiation activities such as value creation through sincere offers and inspection of clauses intensify toward the deadline.