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Role of Investment Shocks in Explaining Business Cycles in Turkey

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  • Canan Yuksel

Abstract

This paper aims to understand the role of investment shocks in explaining output fluctuations observed in Turkish economy. For this purpose a small open economy DSGE model is estimated on Turkish data for 2002:1-2012:2 period by Bayesian methods. Variance decomposition analysis shows that permanent technology shock is the key driving force of business cycles in Turkish economy and the role of investment shock is less spelled.

Suggested Citation

  • Canan Yuksel, 2013. "Role of Investment Shocks in Explaining Business Cycles in Turkey," Working Papers 1312, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  • Handle: RePEc:tcb:wpaper:1312
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    File URL: http://www.tcmb.gov.tr/wps/wcm/connect/EN/TCMB+EN/Main+Menu/Publications/Research/Working+Paperss/2013/13-12
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    More about this item

    Keywords

    Open economy; Bayesian estimation; Business cycle;

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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