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Dynamics of Business Cycle Synchronization in Turkey

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  • Hasan Engin Duran

Abstract

The aim of the present article is to investigate the economic determinants of the synchronization across regional business cycles in Turkey between 1975 and 2010. The vast majority of studies in this field have concentrated on well-known determinants, such as inter-regional trade, financial integration, and industrial specialization, while largely ignoring spatial and geographical factors, including differences across regions in agglomeration, localization economies, market size, and urbanization. In this article, we incorporate these variables into our analysis and evaluate their roles in the comovement of regional business cycles. Our findings indicate two major results: first, low degree of synchronization during 1975-2000 has switched to relatively more correlated and synchronously moving regional cycles during 2004-2010. Second, having tested the variety of determinants, we find that the pairs of regions that have more similar industrial structure and market size, trade integration, and arbitrary degree of agglomeration and urbanization tend to synchronize more. Significance of these variables is robustly evident regardless of the time period analyzed and of the type of methodology employed. Key words: Regional business cycles, Synchronization, Agglomeration, Industrial dissimilarity.JEL: E32, E63, R11.

Suggested Citation

  • Hasan Engin Duran, 2015. "Dynamics of Business Cycle Synchronization in Turkey," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(5), pages 581-606.
    • Handle: RePEc:voj:journl:v:62:y:2015:i:5:p:581-606:id:64
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    More about this item

    Keywords

    Regional business cycles; Synchronization; Agglomeration; Industrial dissimilarity;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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