An analysis of Turkey’s accession to the European Union

We build a two-country dynamic general equilibrium model to study whether European citizens would benefit from the eventual accession of Turkey to the European Union (EU). The results of the simulations show that Turkey’s accession is welfare enhancing for Europeans, provided that Turkish total factor productivity (TFP) increases sufficiently after enlargement. In the benchmark model with no capital mobility, the Europeans are better off if the Turkish TFP increase bridges more than 21% of the initial TFP gap between Turkey and the EU. This figure increases to 33% when capital mobility is introduced

Empirical analysis of transportation investment and economic development at state, county and municipality levels

Numerous studies have found positive correlation between transportation infrastructure investment and economic development. Basically these studies use a conventional production function model augmented by a public capital input, mainly highways, rail and other transportation facilities. While the range of the measured economic growth effects varies widely among studies, the positive elasticity between transportation investment and economic development is now commonly accepted. Still a major puzzling issue is that the magnitude of the measured effect seems to decline significantly as the econometric model is further refined, mainly with regard to space and time lags. That is, the use of national or state data produces elasticity results, which are much larger than when using county or municipality data. Similarly, when we introduce into the econometric model a lag between the times when the transportation investments are made and when the economic benefits transpire, the measured elasticities decline with the size of the lag. Thus, the main objective of this paper is to investigate these issues analytically and empirically and provide a plausible explanation. We do so by using alternative econometric models, applying them to a database, which is composed of longitudinal state, county and municipality observations from 1990 to 2000. The key result is that transportation investments produce strong spillover effects relative to space and time. Unless these factors are properly accounted for many reported empirical results are likely to be overly biased, with important policy implications. Copyright Springer Science+Business Media B.V. 2006highway investment, private capital, public capital, spillover effects, time lags,

Productivity, International Trade and Reference Area Interactions in Shift-Share Analysis: Some Operational Notes

These notes discuss and illustrate two new extensions of shift-share analysis: the productivity and output model and the international trade model. We also review a general limitation of these and other shift-share-type models with respect to the interaction between reference area and the region. A possible solution to this limitation is presented. The new extensions provide better insights about the regional economy but that benefit occurs at a cost. The cost is careful consideration and compensation where relatively large regions or sectors are central to the shift-share assessment. The extensions are important in addressing earlier problems with the shift-share approach. Our solution to shift-share limitation on reference area interaction is vital if the method is to be extended to these multiple environments. Copyright 2005 Blackwell Publishing Ltd..

Is It What We Do or How We Do It? New Evidence on Agglomeration Economies and Metropolitan Growth

This paper uses data on U.S. metropolitan areas from 1970 to 1999 to examine the extent to which recent increases in earnings are attributable to agglomeration economies. We decompose the total change in earnings over the 1970-1999 period into components attributable to changes in relative growth, industry mix and interaction effects. We find strong evidence that relative growth matters more than industry mix. In addition, we find that relative growth effects are related to both localization and urbanization economies. Copyright 2004 by the American Real Estate and Urban Economics Association

Foreign Direct Investment and Regional Economic Performance

Although foreign direct investment into developed economies continues to show dramatic growth, little consensus exists over either its national or regional impacts. The lack of empirical evidence, particularly on a sub-national level, adds to the uncertainty over the efficacy of regional development strategies focused on attracting foreign investment. The present research uses book value and employment measures of U.S. state-level FDI activity to assess the impact of foreign capital on regional growth and productivity performance. The results imply a vital role for FDI in stimulating regions within well-integrated, developed economies. Copyright 2005 Blackwell Publishing Ltd..