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(Vienna, Austria, November 1-15, 2004)  |
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(Vienna, Austria, November 1-15, 2004) |
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(Part A) |
(Part B) |
Summary of the PPT2A & PPT2B files |
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in Turkey, 1987-2003 |
Developments in Turkey (with special reference to the AK-Party Era, 2002-04) |
Developments in Turkey (with Special Focus on Real Exchange Rate Misalignment) |
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Nov. 8, 2004 |
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Nov. 11, 2004 |
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Within a signals approach framework à la Kaminsky, Lizondo and Reinhart, this paper aims both to detect the early warning signals of currency crises in Turkey and to discuss the reliability of an early warning system for this country. To determine major leading indicators of currency crises in Turkey, more than 45 variables are tested and, by using the most relevant 15 variables, a composite index is constructed to estimate the probabilities of currency crises in the country. | Real exchange rate misalignment measures deviations of actual real exchange rate from its long-run, or equilibrium, level. Policy makers and many researchers are interested in predicting and monitoring misalignment in the foreign exchange market, because, in many cases, it is closely related to possible current account problems or impending currency crises. This study mainly aims to discuss the sensitivity of estimation results to the alternative combinations of actual real exchange rate indices and equilibrium definitions, by using quarterly data from 1987 to 2003 for Turkish lira. The 16 measures of misalignment employed in this study show that the differences between these alternative measures vary between 6.5 and 36.5 percent points, which actually is a very strong indication for high sensitivity of the degree of misalignment to the selected combination of the actual and equilibrium real exchange rate indices. | In this presentation, it is aimed to evaluate briefly the macroeconomic developments in Turkey. Although the general sample period covers the years from 1970 to 2004, the focus is on recent developments within the last two years, namely AK-Party era. | This presentation file is prepared as a summary of the two Power Point (PPT) files. |
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(a pdf file in English will be available soon) |
(pdf file in Turkish) |
(no pdf file) |
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