The Association between Current Account Deficit and House Prices in Turkey

Abstract Current account deficit has been a popular research topic among Turkish economists. The study investigates the relation between current account deficit of Turkey and house prices in the country. This paper uses the classical linear regression model and this is run for three times. The results of the model indicate that current account deficit is positively associated with house price changes in Turkey. Another result is that, GDP per capita growth is not significantly associated with house price changes. Not surprisingly, inflation is also positively associated to house prices. The important outcome of the study is that Turkey might experience similar housing market problems in Spain and US as a consequence of Turkey's effort to decrease its current account deficit. Therefore, the study is expected to attract policy maker's attention and start a discussion on how to maintain the current condition of housing market while decreasing the current account deficit. Even though there have been many research on the relation between macroeconomic indicators and house prices, to our knowledge this is the first research on the impact of current account deficit on house prices. JEL classification numbers: E30, E44, R10, R3

Risk-return performances of real estate investment funds in Turkey including the Covid-19 period

The purpose of this research is to give an insight into the Turkish real estate investment funds (T-REIFs) by comparing their risk-return performances with the main benchmark investment tool Istanbul Stock Exchange-100 (BIST-100) Index. This study evaluated the performance of T-REIFs in four different periods between January 2017 and December 2020 (2017m1–2017m12, 2018m1–2018m12, 2019m1–2019m12 and 2020m1–2020m12) including the Coronavirus Disease (Covid-19) period by applying the Sharpe and Treynor ratios. In a well-diversified portfolio both ratios give the same results, but in the presence of non-systematic risk and the portfolio is poorly diversified, the Treynor ratio is a better indicator than the Sharpe ratio. The findings of this study show that rankings of Sharpe and Treynor ratios may differ for each period. These results also support the fact that the portfolios of funds in the Turkish real estate market are not well diversified. By providing corporate tax exemptions, and by enabling the investors to diversify their investments and reduce their risks, real estate investment funds are important alternatives to direct real estate investments in Turkey. In that context, being one of the pioneer studies in this niche and a new topic in emerging markets, analyzing the return performances of T-REIFs and comparing them with the returns of the BIST-100 index is aimed to contribute to literature as well as provide insight to investors who may consider investing in the Turkish real estate capital market instruments

Determinants of economic growth in G20 countries : a panel data approach

During last 10 years some G20 countries had economic instability. They have short and long term challenges such as unemployment, population ageing, globalization etc. In this study it is aimed to analyze macroeconomic indicators of G20 countries’ economic growth using panel data approach. Static linear panel data models were used for determining the effects of independent macro-economic variables on gross domestic product (GDP) of G20 countries including Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, Republic of Korea, Turkey, the United Kingdom and the United States of America. While dependent variable of analyze is gross domestic product (volume), the independent variables are current account balance, general government gross debt, general government revenue, general government total expenditure, gross national savings, inflation (average consumer prices), population, total investment, unemployment rate, volume of exports of goods and services, volume of imports of goods and services. The analysis proposed is based on a panel data (cross sectional time series data) approach. The dataset of this research involves 18 (unemployment rate variable of India was not available on our data set, therefore India was excluded from analysis) of G20 members (cross sectional units). The effects of 11 macroeconomic indicators on gross domestic product volume were examined by using panel data series. The findings of this paper would help G20 countries and investors for creating more effective macroeconomic strategies. For the government side, future rises, falls, and turning points of the macro indicators puts into perspective the effects of government policy created to deal with them. For the investors’ side, future values might increase the possibility of diligent investor in the financial market.peer-reviewe

Housing market activity and macroeconomic variables: an analysis of Turkish dwelling market under new mortgage system

The primary purpose of this paper is to examine dynamic causal relationships between housing market activity (construction permits for private use) and six determinants, including consumer price index (CPI), monetary aggregate (M2), interest rate (IR), industrial production index (IPI), real estate investment trusts' indices (REITIX) and volume of mortgage loans (ML), in Turkish dwelling market under new mortgage system. Granger causality tests, impulse response functions and variance decomposition models are utilized for the period 2002 to 2007