Lutfi Erden

This study analyzes the role of push–pull factors on the level, volatility and comovement of capital flows in emerging markets (EMs). Taking the commonality of capital flows into account, we employ the panel Generalized Autoregressive Conditional Heteroscedasticity model developed by Cermeño and Grier for 16 EMs. This method not only accounts for country‐specific heterogeneity and cross‐section dependence but also allows the examination of the sources of the level, volatility and comovement of capital flows in a single step. The results show that domestic factors explain two‐thirds of the variation in net capital‐flow volatility. While both global and domestic factors, with the prominent ones being global risks and domestic economic growth, influence the comovement, their impacts somewhat vary by the types of capital flows.

This study investigates excessive movements in capital flows called surges or bonanzas. Contrary to the previous work that extensively uses ad‐hoc measures and discretionary thresholds; we adopt a distinctive methodology to detect capital flow surges based on right‐tailed unit root tests. Generalized supremum augmented Dickey‐Fuller (GSADF) proposed by Phillips et al. (2015) is successfully applied to identify asset price bubbles. Exploiting the technical and conceptual similarities in the formations of asset price bubbles and capital flow surges, we perform the GSADF procedure using quarterly net capital flows data from 43 developing countries. The advantages of this procedure are twofold: it can distinguish the behaviour of volatility and explosiveness and diagnose multiple surges in a series. We identified 727 individual surges, 130 different surge episodes, and 4 global capital flow waves over the periods of 1995–2017. Compared with the existing measures, the application of this surge‐detection technique provides a useful tool as a data‐driven method with no need for discretionary thresholds. We also investigate the factors triggering capital flow surges, employing the Fernandez‐Val and Weidner (2016) bias‐adjusted fixed effects probit model and find that domestic factors play a dominant role on the surge occurrences in developing countries.

This paper empirically examines the effects of a fiscal devaluation on bilateral trade. To this end, employers’ social contribution (ESC) and value-added tax (VAT), which stand as the factors that represent typical fiscal devaluation, are embodied within the framework of a gravity model. Fixed effects vector decomposition (FEVD) technique is applied to the empirical models specified within this framework, employing panel data from 22 OECD countries over the 1980–2014 periods. The findings show that the effectiveness of the fiscal devaluation policy seems to alter with respect to how ESC and VAT are measured. Considering the fiscal devaluation policy implemented unilaterally, the policy turns out to be effective in nine countries in the sample.

En tr This study empirically examines the role of government policies on regional efficiency/productivity in Turkey, with the emphasis on the effects of two major policy instruments: investment subsidy and public investment. Moreover, it investigates whether these public policies are subject to an equity-efficiency tradeoff. To this end, the study models the technical inefficiency component of total factor productivity that embodies these policy variables within the framework of a stochastic production frontier analysis. The results suggest that the policy tools are both successful in reducing technical inefficiencies and thus bring about an increased productivity in provincial manufacturing sector. The findings also show that the regional policies have a positive but negligible impact on the efficiency of the provinces with low performance while their efficiency impact is the highest on the provinces with medium performance, a result that points to the presence of an equity-efficiency tradeoff. Bu çalışma yatırım teşvikleri ve kamu yatırımları gibi iki önemli kamu politikasının Türkiye’de bölgesel etkinlik/verimlilik üzerine etkilerini ampirik olarak incelemektedir. Bunula birlikte çalışmada, kamu politikalarının eşitlik-etkinlik ödünlemesine maruz kalıp kalmadığı araştırılmaktadır. Bu amaçla çalışma, stokastik üretim sınırı analizi çerçevesinde, teknik etkinlik bileşenini kamu politikalarının etkilerini içerecek şekilde modellemektedir. Bulgular, her iki kamu politikasının teknik etkinsizliği azaltıcı nitelikte rol oynadığını ve dolayısıyla il bazında imalat sektörünün verimliliğine olumlu katkılar sunduğunu göstermektedir. Bununla birlikte bulgular, kamu politikalarının düşük performanslı illerde düşük, orta performanslı illerde ise en yüksek etkinlik etkileri olduğunu ortaya koymaktadır. Bu ise, kamu politikalarının eşitlik-etkinlik ödünlemesine maruz kaldığına işaret etmektedir.