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MARKUPS AND WELFARE COSTS OF BUSINESS CYCLES IN TURKEY
Author(s) -
Yılmaz Ensar
Publication year - 2014
Publication title -
bulletin of economic research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.227
H-Index - 29
eISSN - 1467-8586
pISSN - 0307-3378
DOI - 10.1111/j.1467-8586.2012.00451.x
Subject(s) - economics , welfare , recession , business cycle , aggregate (composite) , measure (data warehouse) , markup language , wage , econometrics , microeconomics , monetary economics , macroeconomics , labour economics , computer science , market economy , materials science , database , xml , composite material , operating system
The paper, using a simple theory‐based measure of the variations in aggregate economic efficiency in a New Keynessian structure, analyses the nature of the business fluctuations and estimates their welfare costs in Turkey during the period 1998–2009. The measure contains two components: a price markup and a wage markup. It seems that the latter mainly drives the fluctuations in Turkey. The paper also shows that inefficient fluctuations in the allocation of resources do generate moderate welfare costs on average. However, the aggregate efficiency costs increase much more during deep recessions.