Economic Policy Uncertainty in Turkey
La-Bhus Jirasavetakul and
No 13352, CEPR Discussion Papers from C.E.P.R. Discussion Papers
Uncertainty over economic policy plays a key role in economic outcomes. But evidence and quantification for emerging markets are elusive because of measurement and reverse causality issues. In this paper, we construct a news-based economic policy uncertainty (EPU) index for Turkey and assess how it affects Turkish firms. To disentangle the issues of endogeneity and reverse causality, we use a difference-in-differences approach. In sectors with large irreversible investment EPU has a greater effect on growth, investment, and leverage. The results are robust to different definitions of investment irreversibility, lag structure, and selection of sectors.
Keywords: diff-in-diff estimation; economic uncertainty; employment growth; firm-level; Investment Decisions; leverage strategies; policy uncertainty; sector-level; Turkey (search for similar items in EconPapers)
JEL-codes: D80 E22 E66 L20 M51 (search for similar items in EconPapers)
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Working Paper: Economic Policy Uncertainty in Turkey (2018)
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