Rapid credit growth, short-term capital inflows, and associated macro-financial risks in the aftermath of the global crisis necessitated the use of alternative policy instruments in Turkey. Accordingly, the Central Bank of the Republic of Turkey (CBRT) has designed and adopted a new policy mix...

By using the U.S. NBER-CES industry-level data for the 1962-2005 period, we analyze how exogenous changes in firms'borrowing costs, measured by the spread between Baa and Aaa rated corporate bonds, affect employment dynamics and whether external finance dependence differences across industries...

The shock waves of the 2008-09 global financial crisis and the 2011-12 Eurozone debt crisis hit emerging markets from the trade, the finance and the expectations channels. We focus on the finance channel in this paper. We first discuss the challenges arising from capital flow volatility in...

Both emerging and developed economies increasingly use fiscal rules. This paper analyzes the effects of two alternative fiscal rules on debt sustainability. The fixed surplus rule fixes the ratio of primary surplus to gross domestic product (GDP), and the variable surplus rule sets the primary...

This paper is about instability of equilibrium real rents in a pure exchange economy. Our main result hinges upon a low degree of substitutability between housing services and other commodities together with a low share of owner-occupied houses. We argue that regions or economies with a low...

This paper presents a simple model of housing cycles in a two good economy. We establish that nonsubstitutability between housing services and other commodities along with high degree of heterogeneity in home ownership may lead to a stable spiral path converging to a steady-state equilibrium of...