Business cycles in emerging market economies: the role of financial shocks

Download

index.pdf

Date

2014

Author

Pirgan Matur, Eser

Metadata

Show full item record

Item Usage Stats

186
views

123
downloads

This dissertation documents the differences in the course of macroeconomic volatility in emerging market economies and advanced countries. Then the dynamics of emerging market business cycles and macroeconomic effects of financial shocks are investigated using a small open economy real business cycle model with credit constraints calibrated to the Turkish economy. The results indicate that the impact of financial shocks crucially depends on whether the firms can access to alternative sources of finance when borrowing conditions are unfavorable. If the firms can raise their cash flows through other means, the impact of the credit shocks is limited on important macroeconomic aggregates like investment, employment and output. However, conversely, if firms cannot resort to alternative sources of finance in bad times, the negative impact of financial shocks can be quite large. The quantitative analysis implies that financial shocks can account for more than 20 per cent of output fluctuations in the latter case under our benchmark calibration.

Subject Keywords

Macroeconomics., Finance., Business., Financial crises.

URI

http://etd.lib.metu.edu.tr/upload/12618055/index.pdf
https://hdl.handle.net/11511/23927

Collections

Graduate School of Social Sciences, Thesis

Suggestions

OpenMETU
Core

Managing financial instability in emerging markets: A Keynesian perspective Akyüz, Yılmaz (Orta Doğu Teknik Üniversitesi (Ankara, Turkey), 2008-6) The Keynesian analysis of financial instability as developed by Hyman Minsky provides considerable insights into understanding the nature and dynamics of boom-bust cycles driven by international capital flows in emerging markets. Its main policy conclusion that financial control rather than macroeconomic policy holds the key to financial stability is equally valid. There is, however, need to develop a new approach to financial control and place greater emphasis on managing capital inflows than has hitherto ...
The Effects of bank specific, industry specific and macroeconomic factors on bank profitability in OECD countries between 2000-2009 Maltaş, Zeynep; Ayaydın Hacıömeroğlu, Hande; Department of Business Administration (2013) This thesis analyzes the bank-specific, industry-specific and macroeconomic determinants of bank profitability (ROA) in 31 OECD Countries between 2000 and 2009 using a panel data. Each country‟s banking sector is treated as a single representative bank. Fixed effects model is used in the study. Deposits, capitalization, non-interest income, GDP growth are found to have a positive impact on bank profitability while non-performing loans, operating expenses and financial sector development have negative effect...
Fiscal Sustainability in Europe (FISCSUST) Parmaksız, Ömer Kağan; Dikmen Toker, İrem(2015-11-30) The purpose of this research project is to develop a new theoretical framework in evaluating the sustainability of fiscal policy and evolution of debt with particular emphasis on recent European experience. Fiscal or debt sustainability in literature in its most stylized form is defined as satisfying an inter-temporal budget constraint. Although it serves as a useful benchmark lower bound based on 'ability' to pay, this is a very crude approach due to its disregard of many interesting dynamics economic and ...
Financial development and energy consumption in emerging markets: structural shifts in causal linkages Durusu Çiftçi, Dilek; Soytaş, Uğur; Nazlıoğlu, Şaban (null; 2018-11-03) This study examines dynamic causal interrelationships among financial development, energy consumption, and economic growth in the emerging markets by focusing on accounting for structural changes in causal linkages. We first employ the Toda-Yamamoto causality framework and later augment it with Fourier approximation to account for structural shifts – including gradual/smooth shifts. The empirical findings show that accounting for gradual structural shifts matter for the causal linkages between financial dev...
Real Exchange Rates and Growth: Contractionary Depreciations or Appreciations? Özmen, Erdal; YOLCU KARADAM, DUYGU (2021-01-01) This study investigates the impact of real exchange rates (RER) on growth of a large number of advanced (AE) and developing economies (DE) estimating conventional growth models augmented with global financial conditions variables. First of all, replicating Rodrik (2008) and following studies employing panel autoregressive distributed lag (PARDL) and PARDL mean group (PARDL-MG) models, we show that the expansionary depreciation findings for DE are often based on a misinterpretation of an error correction mec...

Citation Formats

E. Pirgan Matur, “Business cycles in emerging market economies: the role of financial shocks,” Ph.D. - Doctoral Program, Middle East Technical University, 2014.