How to Go Green? A General Equilibrium Investigation of Environmental policies for Sustained Growth with an Application to Turkey

Cataloged from PDF version of article.Green growth is a relatively new concept aimed at focusing attention on achieving sustainable development through the efficient use of environmental assets without slowing economic growth. This paper presents a real-world application of the concept, and identifies viable policy options for achieving a complementary environmental regulatory framework that minimizes output and employment losses. The analysis utilizes macro level data from the Turkish economy, and develops an applied general equilibrium model to assess the impact of a selected number of green policy instruments and public policy intervention mechanisms, including market-based incentives designed to accelerate technology adoption and achieve higher employment and sustainable growth patterns. Overall, our results indicate that an integrated employment and urban greening policy strategy that combines a green jobs programme with a set of earmarked tax-cum-innovation policies towards R&D-driven growth, mainly targeted to strategic industrial sectors and agriculture, developing market economies can achieve significant reductions in gaseous emissions and urban waste while maintaining significant gains in productivity and employment. © 2014, Springer-Verlag Berlin Heidelberg

What to smooth: Rate of interest or the foreign exchange? Turkish monetary policy under turbulent times

Cataloged from PDF version of article.This paper studies the new monetary stance of the Central Bank of Republic of Turkey (CBRT) during the Great Recession. We note that characteristics of the post-1997 “great moderation” revealed interest rate smoothing as a valid policy option for the inflation targeting central banks. Utilizing econometric analyses on a general form of a Taylor Rule, we search for the relative weights of the objective function of the CBRT over Jan 2010 – Dec 2013. We find that over the great recession, the CBRT’s focus on “interest smoothing” had been maintained; and yet the burden of adjustment fell disproportionately on the foreign exchange markets. Furthermore, weak credibility of the CBRT, lack of a simple policy rule, and noisy policy communications evidence that pre-requisites of the interest rate smoothing are not being fulfilled. Inevitable sharp policy corrections that follow smoothing periods prove insufficient against the voluminous global flows

Macroeconomics of Turkey's agricultural reforms: an intertemporal computable general equilibrium anlaysis

Cataloged from PDF version of article.Turkey recently launched a set of structural reforms to address elimination of producer price subsidies in its agriculture, and replacing them with a targeted direct income transfer program. The paper investigates analytically viable options of the proposed agricultural-cum-fiscal reform and analyzes the formal links between the public sector fiscal balances, accumulation patterns, dynamic resource allocation, and consumer welfare under a medium-long-term horizon. We utilize a dynamic general equilibrium model. The model results suggest that even though there are expected modest welfare gains of consumers' intertemporal efficiency, the repercussions of these policies on the rural economy and aggregate gross domestic product are likely to be deflationary. (C) 2003 Society for Policy Modeling. Published by Elsevier Inc. All rights reserved

Interest Rate Smoothing and Macroeconomic Instability under Post-Capital Account Liberalization Turkey

Cataloged from PDF version of article.This paper considers the interest rate policy of the Central Bank of the Republic of Turkey (CBRT) in the post-financial liberalization and deregulation era. We find that (1) the Bank's interest rate smoothing tendency is the main determinant of its monetary policy in this period, (2) the CBRT does not seem to be responsive to the developments in real economy (output), and (3) although inflation targeting central banks are not supposed to pay attention to exchange rates, the CBRT appears to be slightly responsive to changes in real exchange rate. In answer to the question of whether there is a deeper underlying Structural constraint binding the CBRT's "independence," it seems clear that the global financial system is restricting the ability of the central banks to pursue "independent" policy objectives

On the structural weaknesses of the post-1999 Turkish disinflation program

In December 1999, Turkey initiated an extensive disinflation program backed and supervised by the International Monetary Fund (IMF). In November 2000, however, Turkey experienced a severe financial crisis, which deepened and has continued to date. This contribution highlights the structural weaknesses of the exchange rate-backed disinflation program as manifested in its liquidity creation mechanism in a small and fragile financial system such as Turkey. This contribution also documents the fragility indicators of the Turkish banking system and demonstrates that the disinflation program led to an increased vulnerability of the banking system throughout 2000-1. Given the structural characteristics of the Turkish banking system, we argue that the orthodox policy of fully connecting the monetary expansion and liquidity requirements of the domestic economy exclusively to the speculative short-term capital flows was clearly a design flaw, overlooked by the IMF. Copyright © 2003 Frank Cass & Co. Ltd

Optimal adjustment to trade shocks under alternative development strategies

The techniques of stochastic control are applied to a CGE model of Turkey to compare the robustness of alternative development strategies to disruptions like the 1979 oil shock. The use of instruments and the extent of deviation of state variables from their target values are compared under three different objective functions (growth, stabilization or equality) and three different development strategies (export expansion, agricultural development led industrialization, or import-substitution). We find that the results are sensitive to both development strategies and objectives. © 1989

A new energy-economy-environment modeling framework: insights from decarbonization of the Turkish power Sector towards net-zero emission targets

The power sector plays a crucial role towards decarbonization for many economies, especially in line with the net-zero targets to limit global warming to 1.5 °C. Technical constraints intrinsic to the sector, penetration of new technologies, investment and operational costs, and its connections with the rest of the economy make the power sector a complex system to analyze. Although there are numerous studies to integrate bottom-up power sector technology models with top-down macroeconomic models, this study is the first attempt to link the three separate and interrelated models within a single framework: an electricity market simulation model, a generation expansion planning model, and an applied general equilibrium model. The proposed framework is implemented to analyze a feasible decarbonization scenario for Türkiye, with a particular focus on the power sector. The results suggest that, given the existing capacity and potential for renewables, Türkiye can achieve a coal-phase out by early 2030s, alongside a trajectory towards a full-fledged fossil fuel phase-out in power generation. The results also indicate that while installed capacity and generation of coal-fired power plants are reduced, real GDP and electricity demand can be maintained and the carbon dioxide emissions from the power sector could be reduced by as much as 50% in 2030 compared to 2018 levels