How Can Recessions Be Brought To An End? Effects Of Macroeconomic Policy Actions On Durations Of Recessions

This paper analyzes how effective macroeconomic policy actions are in ending recessions. We also investigate which structural factors help the country to experience shorter recessions. We implement survival regression analysis and conclude that expansionary monetary policy significantly decreases durations of recessions whereas fixing the exchange rate does not have an effect on the durations of recessions. Expansionary fiscal policy has undesired effects and decreases the probability that recession will end, thus increasing the durations of recessions. The analysis of country specific factors indicates that emerging countries experience shorter recessions. Recessions in countries with higher trade openness last significantly longer. Financial openness and institutional quality do not have significant effects of recession durations. The empirical analysis takes into account alternative probability distributions and endogeneity of policy actions

Analysis of entrant and incumbent bidding in public procurement auctions

We empirically investigate differences in cost-effectiveness of public procurement auctions that are won by entrants and incumbents. We use a unique data set that covers all Turkish public procurement auctions for the years 2004 to 2010. We find that procurement prices of auctions won by entrants are significantly lower. More than half of the entrants cannot survive in the public procurement market and cannot win more than one auction. Our results indicate that policymakers should cultivate competition and promote entry in public procurement auctions

Optimal bidder participation in public procurement auctions

This paper empirically identifies the optimal number of bidders to achieve the lowest procurement prices in public procurement auctions. We examine a unique data set that covers all Turkish government procurement auctions comprising more than half a million observations for the period 2005–2012. We present a novel and easy-to-implement method to investigate the number of bidders required for the public procurement markets to be competitive. Our results suggest that procurement costs decrease until six to eight bidders. Policy makers can employ the method to investigate the optimal number of bidders and design policies to promote competition. Moreover, policy makers can also make use of the optimal numbers as focal points to inspect whether competitive efficiency is achieved in public procurement auctions

Unconventional monetary policy and the stock market's reaction to Federal Reserve policy actions

We examine the change in the effect of Federal Reserve's policy actions on stock returns after the Fed started to use unconventional policy actions. We find that the response of stock returns to monetary policy actions are almost seven times higher after the federal funds rate hit the zero lower bound. We conduct additional analysis to examine the underlying causes of the increase in the impact of monetary policy actions of stock returns. We show that investors rebalance their portfolios towards equity after selling Treasury securities to the Federal Reserve during large scale asset purchases. (C) 2017 Elsevier Inc. All rights reserved

Effects of official dollarisation on a small scale in open economy: the case of Ecuador

El presente artículo investiga los efectos de la dolarización en el desempeño macroeconómico de una pequeña economía abierta, la de Ecuador, empleando para ello un análisis de series de tiempo. Específicamente, exploramos cómo la dolarización implementada en este país afectó la inflación, el PIB, la incertidumbre inflacionaria y la relación entre el dinero y el nivel de precios (de aquí en adelante: la relación dinero-precio). Los cuatro principales hallazgos surgidos de esta investigación son: 1) la inflación acusa niveles más bajos después de la dolarización; 2) el crecimiento del PIB es más elevado tras la dolarización, habiendo controlado previamente algunos factores como los precios del petróleo y el crecimiento del PIB en economías emergentes y latinoamericanas; 3) la incertidumbre inflacionaria, medida a través de la varianza de la inflación mediante el método GARCH, es más baja durante el periodo de dolarización, y 4) una vez implementada la dolarización, la oferta monetaria es endógena, mientras que antes de la misma era exógena. Como resultado de lo anterior, concluimos que la dolarización ha mejorado el desempeño macroeconómico de Ecuador, cambiando la relación dinero-precio en el país. Los resultados obtenidos son robustos ante varias especificaciones empíricas

Which firms are more prone to stock market manipulation?

This study empirically investigates which firms are more susceptible to successful manipulation. For this purpose, a unique data set consisting of manipulation cases from 1998 to 2006 from the Istanbul Stock Exchange (ISE) was collected and firm-specific variables are used to explain these manipulations. Probit regression results show that small firms, firms with less free float rate and a higher leverage ratio are more prone to stock price manipulation. Dynamic probit analysis concludes that the probability of manipulation of a stock is significantly higher for stocks that have been previously manipulated

Effect of Inflation Targeting on Inflation Uncertainty: A SWARCH Analysis

We analyse the success of inflation targeting (IT) in decreasing inflation volatility by investigating inflation variance before and after IT. We contribute to the literature by implementing Markov?Switching AutoRegressive Conditional Heteroscedastic methodology to model inflation volatility. After determining the unbiased conditional variances of inflation in each inflation?targeting country, we investigate structural breaks in inflation variability by both analysing individual countries and conducting a panel data analysis. All of these methods conclude that IT helps most of the countries to achieve lower inflation uncertainty (volatility). We also examine the country?specific factors that determine the effectiveness of inflation?targeting adoption

Does Public E-Procurement Deliver What It Promises? Empirical Evidence from Turkey

This article empirically investigates the economic effects of public e-procurement (PEP) adoption. We use a unique data set provided by the Public Procurement Authority of Turkey that covers all government procurement auctions for the years 2004-12, 588,454 auctions. We conclude that PEP adoption had adverse effects. The number of firms submitting bids in procurement auctions is significantly lower after PEP adoption. The procurement costs are significantly higher after PEP. These results suggest that policy makers should eliminate barriers to e-procurement adoption to gather the intended results of PEP

Price Manipulation by Intermediaries

In this study, we investigate two main research questions using unique individual trade level data from the Istanbul Stock Exchange (ISE; renamed Borsa Istanbul in January 2013): (1) Do brokers conduct manipulative trades in the ISE? (2) Do these brokers gain returns from their manipulative behavior? We examine the trade-based pump-and-dump price manipulation scheme. Using the complete intraday trading history of stocks listed on the ISE over the 2003-6 period, we find that a significant percent of the trades conducted by brokers can be identified as consistent with the pump-and-dump price manipulation scheme, and brokers that conduct more pump-and-dump trades earn marginally higher profits

Has the forecasting performance of the Federal Reserve's Greenbooks changed over time?

We investigate how the forecasting performance of the Federal Reserve Greenbooks has changed relative to commercial forecasters between 1974 and 2009. To this end, we analyze time-variation in the Greenbook coefficients in forecast encompassing regressions. Assuming that model coefficients change continuously, we estimate unobserved components models using Bayesian inference techniques. To verify that our results do not depend on the specific way change is modeled, we also allow the coefficients to change discretely rather than continuously and test for structural breaks using classical inference techniques. We find that the Greenbook forecasts have been consistently superior to the commercial forecasts at all horizons throughout our sample period. Although the forecasting performance gap has narrowed at more distant horizons after the early-to-mid 1980s, it remains significant