Price Setting Behavior in Turkish Industries: Evidence From Survey Data

This study investigates the price setting behavior of Turkish industries based on the results of a survey that was conducted by the Central Bank of the Republic of Turkey. The results show that under normal conditions, the majority of the firms follow time-dependent pricing rule but when significant events occur substantial fraction of them alter their behavior to state dependent reviewing. The median Turkish firm reviews its prices every month, but changes its prices four times a year. Price reviews and changes are affected by: the market share, price discrimination, customer type, firm size and the existence of regulated prices.price-setting, price-rigidity, survey

Expectation Errors, Uncertainty And Economic Activity

The aim of this study is to analyze the relationship between uncertainty and economic activity. For this purpose, we use a confidential firm level panel data set (Business Tendency Survey) from Turkey to form three uncertainty measures, namely total, idiosyncratic and aggregate uncertainty. In particular, we construct expectation errors of firms by comparing their survey responses about expectations and realizations on their production volume. Our results reveal countercyclical relationships between our uncertainty measures and economic activity. We further show that a one standard deviation increase in aggregate uncertainty is followed by a 0 : 5 percent decline in year-on-year change of industrial production on impact. The prolonged effect reaches more than 4 : 7 percent in a year for any of these three measures. In addition to the macroeconomic implications of uncertainty, we exploit the panel dimension of our data set to investigate the effects of firm specific uncertainty on that firm's investment decisions. Ordered probit estimation results show that if a firm makes more expectation errors -faces more uncertainty- it is more likely to defer investment plans even after controlling the aggregate uncertainty.Uncertainty, Qualitative Survey Data, Business Cycles, Investment

Belirsizligin Iktisadi Faaliyet Uzerindeki Etkileri

[TR] Bu notta belirsizlik ile iktisadi faaliyet arasindaki iliski Iktisadi Yonelim Anketi (IYA) verileri kullanilarak incelenmektedir. Firmalarin uretim hacmi gerceklesmesi sorusuna verdikleri yanitlar, ayni doneme iliskin beklenti sorusuna verdikleri cevaplarla karsilastirilmis ve gozlenen beklenti hatalarindan uc farkli belirsizlik olcutu olusturulmustur. Sonuclara gore belirsizligin iktisadi faaliyetle ters yonlu iliskili oldugu gorulmektedir. [EN] This note investigates the relationship between uncertainty and economic activity by using the Business Tendency Survey (BTS) data. Comparing firms’ survey responses about expectations and realizations on their production volume, three different uncertainty measures regarding expectation errors are constructed. Results suggest that the relationship between uncertainty and economic activity is countercyclical.