Quantifying uncertainty and identifying its impacts on the Turkish economy
Saygin Sahinoz () and
Evren Erdoğan Coşar
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Saygin Sahinoz: Central Bank of the Republic of Turkey (TCMB)
Authors registered in the RePEc Author Service: Saygin Cevik ()
Empirica, 2020, vol. 47, issue 2, No 7, 365-387
Abstract In this study, we first construct indices reflecting the financial uncertainty and the uncertainty perception of different agents such as consumers, firms and forecasters. Next, we construct an economic uncertainty index for Turkey based on newspaper coverage frequency. Then, in a dynamic factor model framework, we combine these uncertainty indices to obtain an aggregate measure of economic uncertainty for the Turkish economy. Finally, by using this measure, we investigate the impact of uncertainty on economic activity. Empirical evidence shows that uncertainty has adverse impacts on economic activity in Turkey and the most severe effects of uncertainty are observed on investment.
Keywords: Uncertainty; Business cycle; Turkey (search for similar items in EconPapers)
JEL-codes: C22 C52 D81 E32 (search for similar items in EconPapers)
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Working Paper: Quantifying Uncertainty and Identifying its Impacts on the Turkish Economy (2018)
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