Information frictions and the effects of news media bias on consumption /

Aşçıoğlu, Mert
This thesis develops a model that incorporates information frictions and consumption behavior in order to explain the observations of higher volatility of consumption as well as its excess sensitivity to income in the developing countries. The information frictions in the model arise both from the information source, specified as the biased news media, and the conditions of the consumers that affect the costs they face in forming full information rational expectations. These two channels are argued to be more effective in the developing countries. The model in this thesis uses these specifications to define a heuristic by which the consumers dynamically switch their expectation structures. In each period the consumers choose from two types of expectation structures: full information rational expectations, and expectations through the information provided by the news media. The latter may be biased while the former is costlier to use. The simulation results suggest that higher degrees of information frictions cause higher volatility of consumption as well as an excess sensitivity of consumption to income. Therefore, a higher bias in the source of information as well as higher costs of forming full information rational expectations are proposed as candidates for explaining the different dynamics of consumption between the developed and the developing countries.


The dominance of the dollar and its sustainability in the international monetary system
Köse, Tekin; Ege, Aylin; Department of Economics (2008)
The aim of this thesis is to analyze and evaluate the dominance of the dollar and its sustainability in the international monetary system in the light of recent literature and relevant statistical data. Considering the determinants of an international currency, this thesis focuses on the linkages of the dominance of the dollar with the challenge of the euro as an alternative international currency, the current account deficit of the U.S. and foreign exchange reserve accumulation and reserve diversification ...
Macroeconomic impact of workers' remittances on output growth: evidence from Turkey
Yaşar, Pınar; Tansel, Aysıt; Department of Economics (2005)
In this study, a demand oriented simultaneous equation macroeconometric model with a dynamic perspective is constructed in order to investigate the impact of workers̕ remittances on output growth via their effects on key macro variables such as private consumption, investment and imports for Turkey. The study covers the period of 1964-2003 on an annual basis. Results of the analysis suggest that workers̕ remittances affect output growth in a positive manner through the multiplier process. It is found that t...
Determinants of current account deficits in industrialized and developing coıuntries: an empirical investigation
Kaya Bahçe, Seçil Aysed; Kaya Bahçe, Seçil Aysed; Department of Economics (2005)
This study aims to analyze the determinants of the current account deficits for a broad samples of industrial and developing countries for the period 1984-2001. Using a dynamic panel data estimation procedure, we try to unfold the impact of several macro economic and institutional variables on current account deficits. In this context, we also examine the validity of Feldstein Horioka puzzle and its relevance to the current account imbalances. Results show that better governance, a more sophisticated financ...
Multiregional social accounting matrix and multiplier analysis: an application for Turkish economy
Erdoğan, Eda; Voyvoda, Ebru; Department of Economics (2011)
Social accounting matrix (SAM) is one of the tools used in regional economic analysis, enabling understanding the structure of the economy as well as analyzing the impacts of policies or exogenous shocks. In this thesis, a two-region SAM of Turkey is constructed for the year 2002 and the findings of multiplier analysis are presented. To this end, first, a two-region input-output (I-O) table is constructed using location quotient (LQ) method and using this two-region I-O table, a two-region SAM is compiled. ...
Financial development and energy consumption in emerging markets: Smooth structural shifts and causal linkages
Durusu-Ciftci, Dilek; Soytaş, Uğur; NAZLIOĞLU, ŞABAN (Elsevier BV, 2020-03-01)
This study examines the dynamic interrelationships among financial development, energy consumption, and economic growth in emerging markets by focusing on accounting for structural changes in causal linkages. We first employ the Toda-Yamamoto causality framework and then augment it with a Fourier approximation which captures structural shifts as a gradual/smooth process. The empirical findings show that taking into account gradual structural shifts matters for the causal linkages between financial developme...
Citation Formats
M. Aşçıoğlu, “Information frictions and the effects of news media bias on consumption /,” M.S. - Master of Science, Middle East Technical University, 2014.