Flow time and product cost estimation by using an artificial neural network (ANN): A case study for transformer orders

In electromechanical industrial corporations, determining the production cost of the orders according to the technical specifications demanded by the customer has great importance in giving an accurate price offer. Labor cost is one of the important and most variable cost components that must be estimated in order to give an accurate price offer. In this study, a feed-forward back-propagation artificial neural network (FF-BPN) is used to predict the flow times of power transformer orders of a transformer producer according to the technical specifications given by the customer. The results of this study show that the prediction capability of an artificial neural network is very good for this type of problem and results in better cost estimation than current company practice. A case study is carried out for a manufacturer of electrical transformers in Turkey.     

Forecasting technology diffusion: a new generalisation of the logistic model

The present research proposes a new generalisation of the logistic model aiming at technology diffusion forecasting. Regarding criticisms and failures reported in the literature to apply logistic function for long-term forecasting, in our work we focused on short-term accuracy of forecast. To formulate the model, based on mathematical approximation, at first the differential equation governing the diffusion process is found and then by solving the derived differential equation, the forecast function is obtained. In all steps, mathematical tools from numerical analysis are used. We compared the New Generalized Logistic Model with eight of the most renowned models in the literature. The model led to more accurate fits and forecasts than those obtained from other models we applied for comparison.     

Health and economic growth in high-income countries revisited: evidence from an augmented production function for the period 1980–2009

This paper uses time series data for seven industrialized countries from 1980–2009 to explore the causality between health care expenditure (HCE) and economic growth. We have set up a classical Cobb–Douglas production function including HCE, labor, capital, and an augmented function additionally including the number of patent applications (as a proxy for technology and research) and the total number of tertiary education students (as a proxy for education). Our results show that there is a long-run relationship between growth and HCE. As regards causality, in the classical production function, evidence for mutual causality between GDP and HCE is noted only in France, Germany and England, causality from HCE to GDP is noted in Italy and Japan, while no causality whatsoever is evidenced in Canada and USA. However, a completely different situation is unveiled when the augmented production function is used with mutual causality being noted in all perused variables. The novelty of our study lies first in that it contributes to the health-growth nexus literature for high-income countries which has been quite controversial and second it sets off new variables whose omission might be one of the reasons of the result dichotomy. Results of this study will be very useful for high-income countries currently afflicted by the economic crisis and embark on HCE curtailments or revisions.     

Transatlantic Trade and Investment Partnership and Trans‐Pacific Partnership: Policy Options of China

As a result of deadlocked multilateral trade negotiations, many countries have embarked on the establishment of bilateral and regional trade agreements. Using the Global Trade Analysis Project database and a computable general equilibrium model, our paper focuses on the impacts of the Transatlantic Trade and Investment Partnership (TTIP) and the Trans‐Pacific Partnership (TPP) on the Chinese economy under three scenarios. The results suggest that when only the TTIP is realized, Chinese economic variables are negatively affected. When both the TTIP and the TPP are realized and China is excluded, the combined damage to the Chinese economy is higher than the damage with the TTIP alone. However, the inclusion of China in the TPP has a positively effect on economic variables in China. This indicates that the impacts of China's participation in the TPP compensate for the negative impacts of the TTIP. Therefore, China should consider being part of the TPP to offset the negative impacts of the TTIP.     

Does tourism cause growth? Evidence from Turkey

This paper examines the impact of detailed tourism expenditure on the long-run economic growth by employing Autoregressive Distributed Lag (ARDL) approach and causality test for data set of 2003:1 to 2012:4 in Turkey. The detailed tourism expenditure data are firstly employed for the causality of tourism expenditure on economic growth. The results of the bounds test show that there is a stable long-run relationship between accommodation expenses, transport expenditure, expenditure of sporting activities, sightseeing tour expenditure, clothing–footwear expenditure, gift expenditure and economic growth. The results of the causality test, on the other hand, show that there is a bidirectional causality between accommodation expenses, expenditure of sporting activities, gift expenditure and economic growth and a causal flow from transport expenditure to economic growth which is verified growth-led tourism hypothesis. Results reveal that sightseeing tour expenditure and expenditure of sporting activities are more successful on explaining the long-run growth in Turkey in terms of ARDL coefficients size. This result implies a policy that Turkey needs to invest tourism to gain more especially by focusing accommodation, sightseeing tours, sporting activities and transport infrastructure.     

Testing the validity of PPP theory for African countries

This study examines the purchasing power parity theory for 14 African countries by applying a recent composite time series method that incorporates the Fourier approximation. The structural breaks are modelled as a gradual smooth process by means of a Fourier component. The Fourier unit root test failed to find any evidence showing that real exchange rates for these 14 countries have mean-reverting tendencies. However, both cointegration and Fourier cointegration tests detect a stable long-term relation between the nominal exchange rate and relative price levels for 8 out of 14 countries; moreover, for five countries Fourier component in cointegration analysis is found to suit quite well.     

Re-examination of the long-run purchasing power parity: further evidence from Turkey

In this article, we re-examine the empirical validity of the Purchasing Power Parity (PPP) theory for the Turkish economy. For this purpose, an empirical model is constructed using some contemporaneous estimation techniques such as multivariate co-integration and vector error correction methodology. Our estimation results reveal that the PPP can strongly be supported as a long-run stationary steady-state relationship for the Turkish economy.     

Pricing catastrophe equity put options: Financial implications of engineering decisions

Natural disasters such as earthquakes, floods, and tsunamis cause large-scale loss of life and result in billions of dollars in damages. However, the global insurance and reinsurance sector only bears a portion of this cost; the majority of the bill is still inflicted on corporations, local communities, and the governments that struggle to recover even years following the disaster. One of the key factors why insurance and reinsurance sectors do not play a more active role is the difficulty in absorbing the losses as well as accurately pricing the underlying risks. This article presents a valuation model for catastrophe equity puts (CatEPuts), an alternative method of risk transfer. The proposed valuation model is based on a four-step engineering loss model to compute the fair value of the CatEPut for different hazard intensities and structural responses. The results from test examples show that such a model can provide a necessary link between the engineering characteristics of the underlying physical assets and the fair value of the CatEPut.     

Correction to: When are committees of Condorcet winners Condorcet winning committees?

Review of Economic Design -