Suchergebnisse

The current article analyzes the validity of Okun?s Law and sizable distortions that can occur in the estimation when spatial dependence and cyclical asymmetric impacts are not considered, which is a concern commonly ignored by the existing literature. Primarily spatial panel regressions (SDM, SAR, and SEM) and nonparametric regressions along with specification tests are adopted in terms of the methodology (such as panel unit root tests, panel cointegration, Moran?s I and Geary?s C tests of global spatial dependence, spatial LM, and Hausman tests). Additionally, spatial heterogeneity and cross-regional variation in Okun?s Law are investigated by adopting geographically weighted regression, LISA (local indicators for spatial association), and local Geary?s C analysis. A panel of 26 Turkish NUTS-2 regions from 2004 to 2018 was analyzed. The results clearly revealed that failing to incorporate spatial proximity and asymmetric cycle impacts leads to the biased estimation of Okun?s coefficient, such that during the downswing years of the national economy, Okun?s Law holds robustly: unemployment increases quickly in response to a decline in output. In contrast, during upswing years, the size of Okun?s coefficient is relatively much lower. Moreover, spatial dependence and heterogeneity are sizably evident. Okun?s coefficient is demonstrated to vary significantly across regions that have different industrial and labor market characteristics. As a policy implication, it has been understood that the reduction of unemployment is more difficult than initially understood, as economic growth itself does not provide a solution during upswing periods. The necessary special and region-specific policies are discussed throughout the text.

The aim of the present article is to investigate the economic determinants of
the synchronization across regional business cycles in Turkey between 1975
and 2010. The vast majority of studies in this field have concentrated on
well-known determinants, such as inter-regional trade, financial integration,
and industrial specialization, while largely ignoring spatial and
geographical factors, including differences across regions in agglomeration,
localization economies, market size, and urbanization. In this article, we
incorporate these variables into our analysis and evaluate their roles in the
comovement of regional business cycles. Our findings indicate two major
results: first, low degree of synchronization during 1975-2000 has switched
to relatively more correlated and synchronously moving regional cycles during
2004-2010. Second, having tested the variety of determinants, we find that
the pairs of regions that have more similar industrial structure and market
size, trade integration, and arbitrary degree of agglomeration and
urbanization tend to synchronize more. Significance of these variables is
robustly evident regardless of the time period analyzed and of the type of
methodology employed.