Computing Cournot equilibrium through maximization over prices

This paper presents a characterization of internal Cournot equilibrium based on first-order conditions corresponding to profit maximization over prices. This characterization may yield significant computational advantage as demand functions need not be inverted and simple first-order conditions are obtained.     

Price dispersion across US districts of entry

Price dispersion of US imports are investigated across US districts of entry. Markups explain about 31% of price dispersion, while marginal costs of production explain about 69%; effects of trade costs, for which we have actual data, are almost none.     

The inflation and inflation uncertainty relationship for Turkey: a dynamic framework

This article assesses the interaction between inflation and inflation uncertainty in a dynamic framework for Turkey by using monthly data for the time period 1984–2009. The bulk of previous studies investigating the link between inflation and inflation uncertainty employ Autoregressive Conditional Heteroskedasticity (ARCH)-type models, which consider inflation uncertainty as a predetermined function of innovations to inflation specification. The stochastic volatility in mean (SVM) models that we use allow for gathering innovations to inflation uncertainty and assess the effect of inflation volatility shocks on inflation over time. When we assess the interaction between inflation and its volatility, the empirical findings indicate that response of inflation to inflation volatility is positive and statistically significant. However, the response of inflation volatility to inflation is negative but not statistically significant.     

An analysis of regime shifts in the Turkish economy

We use a time-varying dynamic factor model with regime switching to construct and estimate the leading indicators of the currency crises in Turkey. After that, we analyze the business cycles of the Turkish economy, by using a three-state univariate Markov-switching model. Both models capture the observed dynamics of the Turkish economy over the period 1987–2002.     

Monetary transmission with multiple policy rates: evidence from Turkey

Quantitative easing policies have led to persistent divergence between officially announced policy rates and short-term money market rates in many economies, making it challenging to assess the stance of monetary policy in the aftermath of the global financial crisis. Lack of data variation in short-term interest rates across time dimension has made it difficult to identify the monetary transmission mechanisms. In order to shed some light on this topic, we make advantage of a specific period from Turkey during which the central bank deliberately allowed the policy rates to diverge frequently from the interbank rates due to capital flow management purposes. Using bank-level flow data from this episode, we investigate the relationship between various short-term interest rate measures and bank loan/deposit rates through panel estimation methods. Our findings suggest that interbank rates are more relevant than central bank’s officially announced rates for the transmission of monetary policy when the two diverge from each other persistently. Interbank rates particularly play a key role in the pricing of loans and deposits. These findings provide helpful guidance for evaluating the monetary stance under unconventional policies.     

Assessing the value of museums with a combined discrete choice/count data model

This article assesses the value of Dutch museums using information about destination choice as well as about the number of trips undertaken by an actor. Destination choice is analysed by means of a mixed logit model, and a count data model is used to explain trip generation. We use a utility-consistent framework in which the discrete choice model for destination choice is linked to an indirect utility function. The results are used to compute the compensating variation of particular museums and of the total group of museums in the sample.     

A comparative analysis of inter-industry wage differentials: industrialized versus developing countries

This study aims to compare the available evidence on inter-industry wage structure for industrialized and developing countries and to find whether the industry wage differentials are consistent and stable independent of time and space. Moreover, it tries to clarify some of the determinants of industry wage differentials. International evidence supports the wage differential regularity across countries, and the factors underlying inter-industry wage differentials are found to be more or less the same for both industrialized and developing countries.     

The Fisher hypothesis: a multi-country analysis

This paper tests whether the Fisher hypothesis holds for a sample of 26 countries by assessing the long run relationship between nominal interest rates and inflation rates taking into consideration the short run dynamics of interest rates. The empirical evidence supports the hypothesis that there is a one-to-one relationship between the interest rate and inflation for more than half of the countries under study.     

Inflation Dynamics and its Sources in the Ottoman Empire: 1586–1913

This study examines the dynamics and determinants of inflation in the Ottoman Empire during the 1586–1913 period. There are two possible reasons for inflation: fiscal expansion and monetary expansion, which could be generated through the debasement of local currency (Akçe). We used a set of political and structural variables in order to explain the change in inflation dynamics. In particular, we considered the war years, periods of Ottoman history that show different characteristics (the slow‐down period, the recession period and the break‐up period) and the period of constitutional monarchy. Moreover, we tested whether the inflation process was the same for each sultan and whether each sultan’s behavior during the first year was different from the rest of his reign. The empirical evidence reported here suggests that war accelerated inflation as expected and fiscal expansion rather than the debasement of the Akçe was the main reason for inflation. Moreover, the slow‐down, the recession and the break‐up periods affected inflation positively; both fiscal expansion and the debasement of the Akçe were seen in these three periods as sources of inflation. While employing different inflationary policies during his reign, each sultan accelerated inflation in the first year of his reign by the debasement of the Akçe or by fiscal expansion. Last, the constitutional monarchy period had a significant positive effect on inflation although fiscal expansion, rather than the debasement of the Akçe, was the source of inflation during this period.     

Regression Analysis with a Stochastic Design Variable

In regression models, the design variable has primarily been treated as a nonstochastic variable. In numerous situations, however, the design variable is stochastic. The estimation and hypothesis testing problems in such situations are considered. Real life examples are given.