On Structural Sources of the 1994 Turkish Crisis: a CGE modelling analysis

This paper investigates the impact of the Turkish public sector imbalances on the evolution of the economic crisis during 1990-93. A computable general equilibrium model is used. The theoretical basis of the model rests upon the structuralist/Keynesian macro foundations. Its distinguishing features...

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Bibliographic Details
Published in:International review of applied economics 1998-09, Vol.12 (3), p.397-414
Main Author: Yeldan, A. Erinç
Format: Article
Language:English
Subjects:
Applied general equilibrium models
Balance of trade
Borrowing
Debt financing
Economic crisis
Economic development
Economic growth
Equilibrium
Exchange rates
Expenditures
GDP
Gross Domestic Product
Income distribution
Inflation
International trade
Liberalization
Oligopoly
Pricing
Public sector
Securities markets
State intervention
Structuralism
Trade deficit
Turkey
Value added
Wage levels
Wage rates
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Summary:This paper investigates the impact of the Turkish public sector imbalances on the evolution of the economic crisis during 1990-93. A computable general equilibrium model is used. The theoretical basis of the model rests upon the structuralist/Keynesian macro foundations. Its distinguishing features entail accommodation of oligopolistic mark-up pricing rules in the industrial sectors, and endogenous solution of capacity utilisation and unemployment levels through Keynesian mechanisms of effective final demand. The results of the model underscore the importance of intra-class relations of income distribution and conflict in the evolution of price movements in the Turkish economy. It is further argued that the sources of the capitalist in the administrative interventions of the state towards protection of the capitalist and rural incomes, which would otherwise be squeezed out in favour of wage-labour in the early 1990s.
ISSN:0269-2171
1465-3486
DOI:10.1080/02692179800000015