No abstract

The effects of exchange rate movements on price levels have important implications to macroeconomic policies through the impacts on trade balance and inflation. In contrast to previous studies, we employ a VAR model with time-varying parameters to measure the magnitude of exchange rate pass-through (ERPT). The findings confirm the time-varying pattern in the ERPT, as the magnitude of ERPT has reached its maximum value during the 1994 financial crisis. The decline in the magnitude of ERPT has become more pronounced after the 2001 financial crisis as a result of the implementation of inflation targeting, which has shifted Turkey's economy from a long lasting high inflationary phase to a low inflationary economic environment.

In this article we analyse the evolution of the relationship between budget and trade deficits in Turkey covering the period 1985:1 to 2013:4. The structural break tests suggest the existence of a regime shift after the severe 2001 crisis. Time-varying responses obtained from the TVP-VAR model up to 2003 support the Keynesian view by providing evidence in favour of twin deficits, whereas the remaining responses suggest the remarkable divergence between fiscal and trade deficits.

The aim of the study is to analyze the macroeconomic determinants of foreign direct investment in real estate sector (FDIRE) covering the period from 2003:01-2016:12 for Turkey. To this aim, Johansen cointegration test and VECM (cointegrated VAR) have been employed and also impulse response functions and forecasted error variance decompositions have been analyzed to shed light on the issue of the nexus between selected macroeconomic indicators and FDIRE. Empirical findings suggest that the number of one-year lagged tourist arrivals and real house rent is the most important and statistically significant determinants of foreign direct investment in Turkish real estate sector. The findings imply that real house rent shocks also have a positive and significant impact on real house price.

Tourism sector is one of the important sectors for the countries in terms of increasing employment opportunities, providing income for the economy and raising the foreign currency earnings. Employing 2002 and 2012 input-output tables, the aim of this study is to assess tourism sector of Turkey with the input-output model. According to the results obtained, sectors related to tourism are slightly above the average among all other sectors in terms of employment multipliers, output multipliers and forward - backward linkage effects. The multipliers and linkage effects of these sectors have generally increased in the year of 2012 compared to 2002. Based on Hirschman categories, although the importance of sectors related to tourism generally increased compared to the year of 2002, these sectors are not in the “key sector” category. Consequently, policies increasing the linkages of the tourism sector with the overall economy should be implemented.