Modeling general equilibrium for socially responsible macroeconomics: Seeking for the alternatives to fight jobless growth in Turkey

Download

107-106-1-PB.pdf

Date

2006-12

Author

Telli , Çağatay
Voyvoda, Ebru
Yeldan, Erinç

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

190
views

178
downloads

Despite rapid growth and a significant surge in exports, Turkish economy could not generate jobs at the desired rate. In the post-2001 crisis period Turkish GDP expanded by a cumulative 25% in real terms, and yet the unemployment rate could not be brought below the 10% mark. By some, the meager job creation of the economy is due to the excessive regulatory framework and the tax burden; while others from the structuralist tradition see the joblessness problem as a global phenomenon due to the deflationary environment under the finance-led global economy. In this paper we utilize a computable general equilibrium model to study the jobless growth problem in the Turkish context and examine various policy alternatives to generate more conducive conditions for employment creation. The model is in the Walrasian tradition with nine production sectors, two labor categories and a government operating within an open macroeconomy environment. It accommodates flexible production functions, imperfect substitution in trade; segmented labor markets and open unemployment. The model spans the 2003-2010 period for Turkey with explicit recognition of the current IMF program targets. The model results suggest significant employment gains due to a policy of lower employment taxes. In returns for lowering effective employment tax rates by 5 percentage points, the unemployment rate is observed to fall by 2 percentage points over its base-path. However, as a result of lower tax revenues, the policy suffers from the insufficiency of fiscal funds for public investments and the consequent fall in the quality of public services. If the current IMF program is followed through 2010 without any adjustments on the primary budget targets, we observe that public investments need to be lowered to 2.7% of the GDP. As an alternative, we find that a heterodox program with expanded direct income taxes replacing lower employment taxes, and expanded public investments together with a lower primary surplus target for the public sector may produce socially superior macroeconomic outcomes.

URI

http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/107/78
https://hdl.handle.net/11511/58416

Journal

ODTÜ Gelişme Dergisi

Collections

Department of Economics, Article

Suggestions

OpenMETU
Core

Estimation of cost overrun risk in interrnational project by using fuzzy set theory Han, Sedat; Dikmen Toker, İrem; Department of Civil Engineering (2005) In the global construction market, most construction companies are willing to undertake international projects in order to maximise their profitability by taking advantage of attractive emerging markets and minimise dependence on unfavorable domestic market conditions. In order to be awarded a contract in highly competitive global construction market, companies should excel in choosing the most attractive markets and prepare winning bids for the selected construction projects in those markets. While prepari...
Quantification of Acceleration Claims: a Simplified Approach Ilgar, Ali Özge; Birgönül, Mustafa Talat; Department of Civil Engineering (2005) Operating a successful business within the construction industry has become more difficult for companies as the profitability margins decreased considerably compared to previous years. Even, global economy has created an environment in which construction firms are enforced to bid projects at or below lowest profit levels. At the same time, owners are demanding more difficult projects without increasing the quality of contract documents. This has placed an added burden on the individual contractor to constru...
Causal relationship between construction investment policy and economic growth in Turkey Ozkan, Filiz; Ozkan, Omer; Gunduz, Murat (Elsevier BV, 2012-02-01) The construction industry in countries experiencing severe economic crisis has vital importance to get out of stagnation because of its direct relations with 200 different sectors. In this study, the relationship between the construction growth data (infrastructure, building and residential (public), building and residential (private) investment) and gross domestic product (GDP) is examined for Turkey. To this end, Engle-Granger cointegration, error correction model (ECM) and Granger causality tests were ap...
DEVELOPMENT OF RELIABILITY-BASED MAINTENANCE POLICIES FOR HAUL TRUCKS IN A SURFACE MINE Sarıgül, Mert; Gölbaşı, Onur; Department of Mining Engineering (2022-9-2) The growing production market and the resultant increase in raw material requirements create pressure on mining companies to achieve production at a higher rate by keeping unit operating costs manageable. It is recognized that the performance of mining machinery, maintenance downtime profiles, and operating cost variations are the main parameters effective in the sustainability of machinery fleets. On this basis, developing robust and up-to-date maintenance policies regarding operation dynamics and fleet ma...
Comparison of energy consumption and carbon footprint of wastewater treatment systems through modeling Okan, Bora; Ergüder Bayramoğlu, Tuba Hande.; Department of Environmental Engineering (2019) With increasing population and developing regulations, wastewater treatment plants (WWTP) have started to become a higher energy consuming sector in order to serve higher capacities. In the design and management phases of a treatment plant, energy consumption and carbon footprint of the plant should be considered. In this regard, hypothetical and real case models are created to simulate and compare WWTP systems. In this thesis study, first, municipal WWTPs of Turkey were analyzed to determine the traditiona...

Citation Formats

Ç. Telli, E. Voyvoda, and E. Yeldan, “Modeling general equilibrium for socially responsible macroeconomics: Seeking for the alternatives to fight jobless growth in Turkey,” ODTÜ Gelişme Dergisi, vol. 33, no. 2, pp. 255–293, 2006, Accessed: 00, 2020. [Online]. Available: http://www2.feas.metu.edu.tr/metusd/ojs/index.php/metusd/article/view/107/78.