Economic Policy Uncertainty in Turkey

IMF Working Papers, December 10, 2018

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Economic Policy Uncertainty in Turkey

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Bibliographic details

• Authors: La-Bhus Fah Jirasavetakul, Antonio Spilimbergo
• Published: December 10, 2018
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781484387740.001

Summary and key findings

• Constructed a news-based economic policy uncertainty (EPU) index for Turkey.
• Assessed how EPU affects Turkish firms using firm-level and sector-level analysis.
• Firms with a high share of irreversible investment are more exposed to policy uncertainty.
• In sectors with large irreversible investment, EPU has a greater effect on:
  • growth,
  • investment,
  • leverage.
• Results are robust to different definitions of investment irreversibility, lag structure, and selection of sectors.

Methodology

• Main identification strategy: difference-in-differences approach.
• Exploits cross-sectoral variation in the share of irreversible investment to disentangle endogeneity and reverse causality concerns.
• Analysis uses firm-level micro data and sector-level comparisons.

Subjects, keywords, and technical terms preserved from source

• Subject: Credit default swap, Employment, GDP forecasting, Labor, Money, National accounts
• Keywords: Credit default swap, depreciation rate, diff-in-diff estimation, economic uncertainty, Employment, employment growth, EPU index, firm-level, GDP forecasting, Global, gross investment, investment decisions, investment irreversibility, investment model, leverage strategies, micro data, Policy uncertainty, sector-level, Turkey, WP

Content in this bundle

• Economic Policy Uncertainty in Turkey, WP/18/272, December 2018
  • Economic Policy Uncertainty in Turkey, WP/18/272, December 2018 (Markdown version)
  • Economic Policy Uncertainty in Turkey, WP/18/272, December 2018 (PDF)