Inflation Targeting and Inflation Uncertainty

This article empirically investigates the impact of inflation targeting on inflation uncertainty. We implement PARCH and GARCH methodologies to model conditional variance of inflation. We also investigate the relationship between level and volatility of inflation to analyze the validity of the Friedman hypothesis for IT countries. We find that most of the inflation targeting countries have significantly lower inflation variances after inflation targeting. In most of the IT countries, the relationship is consistent with the Friedman hypothesis.     

A study of zero-out auctions: testbed experiments of a process of allocating private rights to the use of public property

Summary This paper applies an experimental testbed methodology to the evaluation of a proposed mechanism for allocating the right to land at the New York airports. The mechanism is called a zero-out auction because it is supposed to allocate the rights efficiently like an auction while leaving all of the consumer's surplus with the buyers (as opposed to allocating some to the seller as would be the case with an ordinary auction). A new behavioral hypothesis is introduced to account for limited rationality of individuals and unusual behaviors of the process. The axiom, called theunbiased expectations hypothesis, does a good job of modeling individual behavior in the context of a game model.We acknowledge the financial support of the National Science Foundation and the Caltech Laboratory for Experimental Economics and Political Science. Comments by David Grether, John Ledyard, Michael Levine, Jennifer Reinganum, and Richard Sutch have been very helpful.     

The relationship between tourism,CO2 emissions and economic growth: a case of Mediterranean countries

This study explores the impact of tourism on economic growth considering CO₂ emissions utilizing panel data techniques for a sample of Mediterranean countries. The cointegration tests reveal that there is a positive long-run equilibrium between tourism, CO₂ emissions and economic growth. This positive long-run relationship may suggest that tourism increases the level of CO₂ emissions and has a statistically significant impact on economic growth in Mediterranean countries. Emirmahmutoglu and Kose (2011. Testing for Granger causality in heterogeneous mixed panels. Economic Modelling, 28(3), 870–876.) test results reveal that the tourism-led growth hypothesis, which suggests that tourism contributes to economic growth, is valid for Egypt, Italy, and Spain. Additionally, there exists a bidirectional relationship between tourism and economic growth both in Morocco and Turkey.     

Gender,generation and sustainable consumption: Exploring the behaviour of consumers from Izmir,Turkey

This study investigates the relationship between consumers’ sustainable consumption behaviour and both gender and generation‐related individual differences in a sample of Turkish consumers. A total of 393 participants from different generations and gender took part in the study. To measure sustainable consumption behaviour, we used four‐dimensional sustainable consumption behaviour scale. The results showed that generation is associated with unneeded consumption as a dimension of sustainable consumption behaviour. Consumers who are Baby Boomers found to have the highest level of unneeded consumption behaviour while Gen‐Zers have fewest. Additionally, data supported the association between gender and sustainable consumption behaviour. Women showed a higher level of sustainable consumption behaviour both in overall behaviour and tendency to reuse products. Taken together, the findings suggest that gender and generation of consumers can differentiate sustainable consumption behaviour. The implications of these findings, as well as the limitations and future directions, are also discussed.     

Planning capital-labor substitution and intertemporal equilibrium with a non-linear multi-sector growth model

A non-linear multi-sector model, postulating sectoral production functions and price-responsive demand functions linked around an input-output matrix in a general equilibrium framework, is used to simulate capital-labor substitution on a growth path characterized by intertemporal equilibrium. It demonstrates how the ‘temporary equilibrium’ or ‘sequential temporary equilibrium’ form of models that allow substitution can be extended into an intertemporally indecomposable equilibrium model without abandoning interaction between prices and quantities in the determination of technology and demand. The model is applied to the analysis of the impact of changes in real-wage growth on the characteristics of the equilibrium growth path of the Turkish economy with special attention given to the employment problem.     

Is corporate social responsibility sufficient enough to explain the investment by socially responsible funds?

I propose an explanation for investment decisions by socially responsible investment funds (SRI) on the firms with higher corporate social responsibility (CSR). Different from the previous literature, I use a unique and comprehensive measure that considers both firm CSR ratings and fund CSR perception. I show SRI mutual funds increase their ownership about 15 % for one unit increase in the firm CSR score when those funds are highly sensitive to CSR. This finding is more pronounced for employee relations and society areas of CSR. The results also hold for a broader range of mutual funds. While industry concentration does not have influence on the fund investment, SRI funds particularly choose socially responsible firms operating in construction, transportation, personal services, and financial sector. I show the funds with CSR sensitivity underperform the market in general and fail to improve their portfolio performance after they invest in the firms with high CSR.     

Analyzing the resource pull effects of devaluation under exchange control

This paper analyzes the resource pull effects of a discrete change in the exchange rate under conditions of exchange control and import rationing. A devaluation leads to contraction rather than expansion in import substituting subsectors if the predevaluation situation is characterized by effective inport rationing. The argument is illustrated using a multi-sector model of the Turkish economy.     

Financial Deepening and Economic Growth in Gulf Cooperation Council Countries

Abstract

The goal of this study is to investigate the causal relationship between financial development and economic growth in Gulf Cooperation Council (GCC) countries, i.e. Bahrain, Oman, Kuwait, Qatar, United Arab Emirates and Saudi Arabia, over the period 1980–2012. We employ panel unit root tests, and Error Correction Model and cointegration techniques to detect long-run and short-run causalities between the variables used in our study. The overall empirical results reveal that the financial sector development contributes significantly to economic growth in the GCC countries. Our results could be of great interest for policymakers since the financial sector could play a crucial role in lowering the dependency of the governments to oil revenues and could contribute significantly to spur economic growth.