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THIRLWALL’S BPCG MODEL WITH CAPITAL FLOWS AND DISAGGREGATED IMPORTS SECTORS USING A SIMPLIFIED * GENERAL SOLUTION (SGS): THE CASE OF TURKEY, 1998-2019

Year 2023, , 202 - 242, 31.01.2023
https://doi.org/10.14783/maruoneri.1187973

Abstract

In this paper, we considered an extended version of the BPCG model incorporating both the capital inflows and some possible structural changes by disaggregating total imports into intermediate, consumption and capital imports for the 1998-2019 period to study the Turkish economy. We calculated the rate of growth of Turkish income for the extended BPCG model based on a Simplified General Solution (SGS) using the estimated income and price elasticities of demands for three types of imports separately and the time-varying shares of exports earnings in total imports expenditures and the time-varying shares of intermediate, consumption and capital imports sectors. The time-varying shares are introduced in order to capture some structural changes in the composition of imports and the type of financing the trade deficit in addition to the changes in the composition of manufactured imports. We observed that the economic growth in Turkey was almost always accompanied with heavy capital inflows which helped the financing of the merchandise trade deficits. Even though the real exports increased by an average of 6.01% during 1998-2019 period, its relatively small contribution to the rate of growth of income was found to be due to the fact that we took into account the rise in intermediate imports attributable to an increase in manufactured exports confining the BP-Equilibrium growth rate of Turkish income. Moreover, we also found that an average of 0.49% deterioration in the real exchange rate (RER) had a very small effect. We also pointed out that the short-run variations may be more important from a policy perspective, where the policy-makers may be more concerned for the next two or three years by taking into account the short run influences of especially those of expected abrupt changes in capital flows. Finally, we noticed that a first stylized fact for the Turkish economy seemed to be abrupt decreases in capital flows before/during the recessions like those in 2001 and 2009 and a second stylized fact that the Turkish economy grows during the periods when heavy capital inflows increase, generally after the recessions.

References

  • Araujo, R. A. and Lima, G. T. (2007), ‘A Structural Economic Dynamics Approach to Balanceof-Payments-Constrained Growth’, Cambridge Journal of Economics, Vol. 31 (5): p.755-74.
  • Atesoglu, H. S. (1993-94), ‘Exports, Capital Flows, Relative Prices and Economic Growth in Canada’, Journal of Post Keynesian Economics, Vol. 16 (2): p.289-97.
  • Blecker, R. A. and Ibarra, C. A. (2013), ‘Trade Liberalization and the Balance of Payments Constraint with Intermediate Imports: the case of Mexico revisited’, Structural Change and Economic Dynamics, Vol. 25: p.33-47.
  • Blecker, R. A. and Setterfield, M (2019), Heterodox Macroeconomics: Models of Demand, Distribution and Growth, Edward Elgar Publishing, Cheltenham, UK, Northampton, MA, USA.
  • Dickey, D.A. and Fuller, W.A. (1981). Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root. http://www.u.arizona.edu: http://www.u.arizona.edu/~rlo/readings/278800.pdf
  • Elitok, S. P. and Campbell, A. (2018), ‘The Balance of Payments as a Constraint on Turkey’s Growth: 1960-2004’, University of Utah, Department of Economics Working Paper Series, Working Paper No: 2008-13.
  • Gouvea, R. R. and Lima, G. T. (2010), ‘Structural Change, Balance of Payments Constraint and Economic Growth: Evidence from the Multisectoral Thirlwall’s Law’, Journal of Post Keynesian Economics, Vol.33 (1), p.169-204.
  • Gouvea, R. R. and Lima, G. T. (2013), ‘Balance of Payments Constraint Growth in a Multisectoral Framework: a Panel Data Investigation’, Journal of Economic Studies, Vol.40 (2), p.240-54.
  • Gokce, A. and Cankal, E. (2013), ‘Balance-of-Payments Constrained Growth Model for the Turkish Economy’, Economic Modelling, Vol.35, p.140-44.
  • Halicioglu, F. (2012), ‘Balance-of-Payments-Constrained Growth: the case of Turkey’, Journal of Post Keynesian Economics, Vol.35 (1), p.65-78.
  • Harrod, R. (1933) International Economics, Cambridge: Cambridge University Press.
  • Houthakker, H. and Magee, S. (1969), ‘Income and Price Elasticities in World Trade’, Review of Economics and Statistics, Vol. 51 (2), p.111-25.
  • Ibarra, C. (2011a), ‘A note on Intermediate Imports and the BPCG model in Mexico’, Economic Change and Restructuring, Vol.44 (4), p.357–368.
  • Ibarra, C. A. (2011b), ‘Import Elasticities and the External Constraint in Mexico’, Economic Systems, Vol 35-3, p.363–377. https://doi.org/10.1016/j.ecosys.2010.09.004
  • Ibarra, C. A. (2011c), ‘Capital Flows, Real Exchange Rate, and Growth Constraints in Mexico’. International Review of Applied Economics, Vol.25 (6) , p.653–668. https://doi.org/10.1080/02692171.2011.557047
  • Ibarra, C. A. and Blecker, R. A. (2016), ‘Structural Change, the Real Exchange Rate and the Balance of Payments in Mexico, 1960-2012’, Cambridge Journal of Economics, Vol. 40 (2): p.507-39.
  • Kern, D. (1978), ‘An International Comparison of Major Economic Trends 1953-76’, National Westminster Bank Quarterly Review, May, p.38-47.
  • Kwiatkowski, D., Phillips, P.C.B., Schmidt, P. and Shin, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root. http://debis.deu.edu.tr:
  • http://debis.deu.edu.tr/userweb//onder.hanedar/dosyalar/kpss.pdf
  • Lall, S. (2000), The Technological Change and Performance of Developing Country Manufactured Exports, 1985-98’, Oxford Development Studies, Vol. 28 (3).
  • McCombie, J.S.L. and A.P. Thirlwall (1997), ‘Economic Growth and the Balance-of-Payments constraint Revisited’, in P.Arestis, G. Palma and M. Sawyer (eds), Markets, Unemployment and Economic Policy: Essays in Honour of Geoff Harcourt, Vol.2, Abingdon, UK: Routledge, p.498-511.
  • Moreno-Brid, J.C. (1998-99), ‘On Capital Flows and the Balance-of-Payments-constrained Growth Model’, Journal of Post Keynesian Economics, Vol. 21 (2): p.283-98.
  • Moreno-Brid, J.C. (2003), ‘Capital flows, Interest payments and the Balance-of-Payments Constrained Growth Model: a Theoretical and Empirical analysis’, Metroeconomica, Vol. 54 (2–3), p.346–365.
  • Özçam, A. (2021), ‘An Explicit Partial-Equilibrium Model to Justify the Generalized Marshall-Lerner Condition (GML)’, Metreoeconomica,, Vol 72, Issue 1, p. 173-188.
  • Pasinetti, L. (1993). ‘Structural Economic Dynamics’, Cambridge University Press. https://doi.org/10.1017/CBO9780511551444
  • Pasinetti, L. L. (1983). ‘’Structural Change and Economic Growth’’. In Cambridge Books. Cambridge University Press https://ideas.repec.org/b/cup/cbooks/9780521274104.html
  • Pesaran, M.H., Shin, Y. and Smith, R.J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. https://sci-hub.se: https://scihub.se/https://doi.org/10.1002/jae.616
  • Phillips, P.C.B. and Perron, P. (1988). ‘’Testing for a unit root in time series regression’’ https://s3.amazonaws.com: https://s3.amazonaws.com/academia.edu.documents/30356828/phillipsperron1988.pdf ?response-content-disposition=inline%3B%20filename%3DTesting_ for_a_unit_root_in_time_series_r.pdf&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz- Credential=AKIAIWOWYYGZ2Y53UL3A%2F20200
  • Tatliyer, M. (2017), ‘Balance of Payments Constrained Growth in Turkey (1950-2014)’ Kırklareli Üniversitesi, İktisadi ve İdari Bilimler Fakültesi Dergisi, Vol. 6: (2), p. 21-35.
  • Thirlwall, A. P. (1979), ‘The Balance of Payments Constrained as an Explanation of International Growth Rate Differences’ Banca Nazionale del Lavoro Quarterly Review, Vol. 128, 45-53.
  • Thirlwall A. P. and Hussain, M. N. (1982), ‘The Balance of Payments Constraint, Capital Flows and Growth Rates Differences Between Developing Countries’, Oxford Economic Papers, Vol. 10: p.498-509.
  • Uygur, E. (2001), ‘2000 Kasım ve 2001 Şubat Krizleri Üzerine Değerlendirmeler’, Mülkiye Dergisi, Vol. XXV: (227).
  • Uygur, E. (2010), ‘The Global Crisis and the Turkish economy’, Discussion Paper, No.2010/3, Turkish Economic Association, Ankara.
  • Yeldan, E. (2002), ‘The Ravages of Neo-Liberalism: Economy, Society and Gender in Turkey’ in N. Balkan and S. Savran (eds), On the IMF-Directed Disinflation Program in Turkey: A Program for Stabilization and Austerity or a Recipe for Impoverishment and Financial Chaos?, Nova Science Pub Inc; UK ed. edition.
  • Cömert, H. and Yeldan, E. (2018), ‘A Tale of Three Crisis in Turkey: 1994, 2001 and 2008-09’, Political Economy Research Instıtute, Working Papers Series, Number 465.

BASİTLEŞTİRİLMİŞ BİR GENEL ÇÖZÜM KULLANILARAK THIRLWALL’UN SERMAYE AKIŞLI VE AYRIŞTIRILMIŞ İTHALAT SEKTÖRLÜ ÖDEMELER DENGESİ KISITLI BÜYÜME MODELİ: TÜRKİYE’NİN DURUMU, 1998-2019

Year 2023, , 202 - 242, 31.01.2023
https://doi.org/10.14783/maruoneri.1187973

Abstract

Bu makalede, sermaye hareketleri ve yapısal değişim içeren BPCG modelinin geliştirilmiş bir versiyonunu toplam ithalat harcamalanı ara, tüketim ve sermaye ithalat kalemlerine ayrıştırarak 1998-2019 dönemde Türkiye ekonomisini incelemek için kullandık. Basitleştirilmiş Genel Çözüm (BGÇ) kullanarak Türkiyenin gelirinin büyüme oranını, her üç tip ithalat harcamaları için talebin gelir ve fiyat esneklikleri, zaman içinde değişen ihracat harcamaları bileşenleri ve ara, tüketim ve sermaye ithalatı harcamalarını kullanarak hesapladık. Bileşenlerdeki zaman içindeki değişimler, ithalat kalemlerinde, imalat sanayi ithalatında muhtemel değişiklikleri ve ticari dengenin finansman tipini modelde gösterebilmek için incelenmiştir. Türkiye ekonomisinin büyümesinin hemen hemen her zaman ticari dengeyi finanse eden yoğun sermaye girişleriyle birlikte olduğu gözlenilmiştir. 1998-2019 döneminde reel ihracat ortalamada %6.01 çoğalmasına rağmen, ekonominin büymesine olan katkısının mukayeseli olarak az olması, sanayi ihracatı artışında ara ithalat mallarının çoğalarak, Türkiye ‘nin Ödemeler Dengesi Kısıtlı gelirini sınırladığı bulunmuştur. İlaveten, reel kurda %0.49’luk bir bozulmanın çok az bir etkisi olduğu saptanmıştır. Özellikle sermaye hareketlerindeki ani değişimler hesaba katıldığında, politika perspektifinden gelecekteki iki veya üç yıla bakılırsa, kısa dönemli dalgalanmaların daha önemli olduğu vurgulanmıştır. Son olarak, Türkiye ekonomisi ile ilgili birinci stilistik gerçek 2001 ve 2009’daki gibi resesyonlardan önceki ani sermaye akımlarındaki değişimler ve ikinci olarak ise, Türkiye ekonomisinin büyüdüğü dönemler hep sermaye girişlerinin olduğu zamanlar etkili olmuştur.

References

  • Araujo, R. A. and Lima, G. T. (2007), ‘A Structural Economic Dynamics Approach to Balanceof-Payments-Constrained Growth’, Cambridge Journal of Economics, Vol. 31 (5): p.755-74.
  • Atesoglu, H. S. (1993-94), ‘Exports, Capital Flows, Relative Prices and Economic Growth in Canada’, Journal of Post Keynesian Economics, Vol. 16 (2): p.289-97.
  • Blecker, R. A. and Ibarra, C. A. (2013), ‘Trade Liberalization and the Balance of Payments Constraint with Intermediate Imports: the case of Mexico revisited’, Structural Change and Economic Dynamics, Vol. 25: p.33-47.
  • Blecker, R. A. and Setterfield, M (2019), Heterodox Macroeconomics: Models of Demand, Distribution and Growth, Edward Elgar Publishing, Cheltenham, UK, Northampton, MA, USA.
  • Dickey, D.A. and Fuller, W.A. (1981). Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root. http://www.u.arizona.edu: http://www.u.arizona.edu/~rlo/readings/278800.pdf
  • Elitok, S. P. and Campbell, A. (2018), ‘The Balance of Payments as a Constraint on Turkey’s Growth: 1960-2004’, University of Utah, Department of Economics Working Paper Series, Working Paper No: 2008-13.
  • Gouvea, R. R. and Lima, G. T. (2010), ‘Structural Change, Balance of Payments Constraint and Economic Growth: Evidence from the Multisectoral Thirlwall’s Law’, Journal of Post Keynesian Economics, Vol.33 (1), p.169-204.
  • Gouvea, R. R. and Lima, G. T. (2013), ‘Balance of Payments Constraint Growth in a Multisectoral Framework: a Panel Data Investigation’, Journal of Economic Studies, Vol.40 (2), p.240-54.
  • Gokce, A. and Cankal, E. (2013), ‘Balance-of-Payments Constrained Growth Model for the Turkish Economy’, Economic Modelling, Vol.35, p.140-44.
  • Halicioglu, F. (2012), ‘Balance-of-Payments-Constrained Growth: the case of Turkey’, Journal of Post Keynesian Economics, Vol.35 (1), p.65-78.
  • Harrod, R. (1933) International Economics, Cambridge: Cambridge University Press.
  • Houthakker, H. and Magee, S. (1969), ‘Income and Price Elasticities in World Trade’, Review of Economics and Statistics, Vol. 51 (2), p.111-25.
  • Ibarra, C. (2011a), ‘A note on Intermediate Imports and the BPCG model in Mexico’, Economic Change and Restructuring, Vol.44 (4), p.357–368.
  • Ibarra, C. A. (2011b), ‘Import Elasticities and the External Constraint in Mexico’, Economic Systems, Vol 35-3, p.363–377. https://doi.org/10.1016/j.ecosys.2010.09.004
  • Ibarra, C. A. (2011c), ‘Capital Flows, Real Exchange Rate, and Growth Constraints in Mexico’. International Review of Applied Economics, Vol.25 (6) , p.653–668. https://doi.org/10.1080/02692171.2011.557047
  • Ibarra, C. A. and Blecker, R. A. (2016), ‘Structural Change, the Real Exchange Rate and the Balance of Payments in Mexico, 1960-2012’, Cambridge Journal of Economics, Vol. 40 (2): p.507-39.
  • Kern, D. (1978), ‘An International Comparison of Major Economic Trends 1953-76’, National Westminster Bank Quarterly Review, May, p.38-47.
  • Kwiatkowski, D., Phillips, P.C.B., Schmidt, P. and Shin, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root. http://debis.deu.edu.tr:
  • http://debis.deu.edu.tr/userweb//onder.hanedar/dosyalar/kpss.pdf
  • Lall, S. (2000), The Technological Change and Performance of Developing Country Manufactured Exports, 1985-98’, Oxford Development Studies, Vol. 28 (3).
  • McCombie, J.S.L. and A.P. Thirlwall (1997), ‘Economic Growth and the Balance-of-Payments constraint Revisited’, in P.Arestis, G. Palma and M. Sawyer (eds), Markets, Unemployment and Economic Policy: Essays in Honour of Geoff Harcourt, Vol.2, Abingdon, UK: Routledge, p.498-511.
  • Moreno-Brid, J.C. (1998-99), ‘On Capital Flows and the Balance-of-Payments-constrained Growth Model’, Journal of Post Keynesian Economics, Vol. 21 (2): p.283-98.
  • Moreno-Brid, J.C. (2003), ‘Capital flows, Interest payments and the Balance-of-Payments Constrained Growth Model: a Theoretical and Empirical analysis’, Metroeconomica, Vol. 54 (2–3), p.346–365.
  • Özçam, A. (2021), ‘An Explicit Partial-Equilibrium Model to Justify the Generalized Marshall-Lerner Condition (GML)’, Metreoeconomica,, Vol 72, Issue 1, p. 173-188.
  • Pasinetti, L. (1993). ‘Structural Economic Dynamics’, Cambridge University Press. https://doi.org/10.1017/CBO9780511551444
  • Pasinetti, L. L. (1983). ‘’Structural Change and Economic Growth’’. In Cambridge Books. Cambridge University Press https://ideas.repec.org/b/cup/cbooks/9780521274104.html
  • Pesaran, M.H., Shin, Y. and Smith, R.J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. https://sci-hub.se: https://scihub.se/https://doi.org/10.1002/jae.616
  • Phillips, P.C.B. and Perron, P. (1988). ‘’Testing for a unit root in time series regression’’ https://s3.amazonaws.com: https://s3.amazonaws.com/academia.edu.documents/30356828/phillipsperron1988.pdf ?response-content-disposition=inline%3B%20filename%3DTesting_ for_a_unit_root_in_time_series_r.pdf&X-Amz-Algorithm=AWS4-HMAC-SHA256&X-Amz- Credential=AKIAIWOWYYGZ2Y53UL3A%2F20200
  • Tatliyer, M. (2017), ‘Balance of Payments Constrained Growth in Turkey (1950-2014)’ Kırklareli Üniversitesi, İktisadi ve İdari Bilimler Fakültesi Dergisi, Vol. 6: (2), p. 21-35.
  • Thirlwall, A. P. (1979), ‘The Balance of Payments Constrained as an Explanation of International Growth Rate Differences’ Banca Nazionale del Lavoro Quarterly Review, Vol. 128, 45-53.
  • Thirlwall A. P. and Hussain, M. N. (1982), ‘The Balance of Payments Constraint, Capital Flows and Growth Rates Differences Between Developing Countries’, Oxford Economic Papers, Vol. 10: p.498-509.
  • Uygur, E. (2001), ‘2000 Kasım ve 2001 Şubat Krizleri Üzerine Değerlendirmeler’, Mülkiye Dergisi, Vol. XXV: (227).
  • Uygur, E. (2010), ‘The Global Crisis and the Turkish economy’, Discussion Paper, No.2010/3, Turkish Economic Association, Ankara.
  • Yeldan, E. (2002), ‘The Ravages of Neo-Liberalism: Economy, Society and Gender in Turkey’ in N. Balkan and S. Savran (eds), On the IMF-Directed Disinflation Program in Turkey: A Program for Stabilization and Austerity or a Recipe for Impoverishment and Financial Chaos?, Nova Science Pub Inc; UK ed. edition.
  • Cömert, H. and Yeldan, E. (2018), ‘A Tale of Three Crisis in Turkey: 1994, 2001 and 2008-09’, Political Economy Research Instıtute, Working Papers Series, Number 465.
There are 35 citations in total.

Details

Primary Language English
Journal Section Makale Başvuru
Authors

Nilgün Yılmaz This is me 0000-0002-4422-938X

Ahmet Özçam 0000-0002-4145-6296

Publication Date January 31, 2023
Published in Issue Year 2023

Cite

APA Yılmaz, N., & Özçam, A. (2023). THIRLWALL’S BPCG MODEL WITH CAPITAL FLOWS AND DISAGGREGATED IMPORTS SECTORS USING A SIMPLIFIED * GENERAL SOLUTION (SGS): THE CASE OF TURKEY, 1998-2019. Öneri Dergisi, 18(59), 202-242. https://doi.org/10.14783/maruoneri.1187973

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