SHOCKS AND GROWTH: FOUR ESSAYS İBRAHİM HAKAN YETKİNER

Transcription

1 SHOCKS AND GROWTH: FOUR ESSAYS İBRAHİM HAKAN YETKİNER

2 Labyrint Publication P.O. Box AR Capelle a/d Ijssel The Netherlands Fax: +31 (0) , İbrahim Hakan Yetkiner All rights reserved. No part of this publication may be reprinted or utilized in any form or by any electronic, mechanical or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without written permission from the copyright owner. ISBN Printed by: Ridderprint, Ridderkerk

3 Rijksuniversiteit Groningen SHOCKS AND GROWTH: FOUR ESSAYS Proefschrift ter verkrijging van het doctoraat in de Economische Wetenschappen aan de Rijksuniversiteit Groningen op gezag van de Rector Magnificus, dr. F. Zwarts, in het openbaar te verdedigen op donderdag 9 oktober 2003 om 16 uur door İbrahim Hakan Yetkiner geboren op 6 maart 1965 te Izmit (Turkije)

4 Promotores: Co-promotor: Prof. dr. mr. C.J. Jepma Prof. dr. S. Brakman Dr. A. de Vaal Beoordelingscommissie: Prof. Dr. B. van Ark Prof. Dr. H. Garretsen Prof. Dr. J. Muysken

5 This study is dedicated to the victims of human rights violations

6 Acknowledgments This thesis contains part of my research I conducted as a Ph.D. student (aio) at the University of Groningen, Department of Economics, during the period Many people from many universities have been of great help during my research. First of all, I would like to thank Catrinus Jepma, Steven Brakman, and Albert de Vaal not only for their guidance and insight throughout the four years but also for their confidence in me. While keeping a strong support on my research efforts, they also gave me a chance to learn how to conduct research during four years. Without their trust, this work would have never been materialized. I would like to also thank the examining committee consisting of Joan Muysken, Bart van Ark, and Harry Garretsen for reading the entire manuscript and providing helpful comments. Second, I would like to thank Adriaan van Zon, Joan Muysken, and Thomas Ziesemer of MERIT and the Department of Economics at Maastricht University for their full support since I have been in the Netherlands. Joint research with them gave me the opportunity to gain not only a momentum in my profession but also their friendship that I will always keep as a valuable asset. Third, many people including Hong Bo, Marco Haan, Ben Heijdra, Jacob de Haan, Jan Jacobs, Peter Kooreman, Gerard Kuper, and Linda Toolsema provided helpful comments on my works, included in this manuscript or not, and contributed substantially to advance myself in my profession. vi

7 Fourth, I would like to thank (i) the SOM bureau that have unlimited energy in supporting Ph.D. students; (ii) NAKE organizers; and (iii) our departmental secretary Heidi Scholtz, the library staff, and all other personnel of the Faculty for their help. Finally, I would like to thank my wife and my son for their constant belief in me and for their endless support. They suffered a lot during these four years from my regular mental and physical absence that I cannot compensate by any means. I hope this material evidence can partly alleviate that. İbrahim Hakan Yetkiner vii

8 Contents ACKNOWLEDGEMENTS... vi LIST OF TABLES... xi LIST OF FIGURES... xii 1 PROLOGUE INTRODUCTION DEFINING SHOCKS IN THE GROWTH CONTEXT Natural Shocks Market Shocks Policy Change Shocks THE PLACE OF THIS DISSERTATION IN THEORY ON SHOCKS CONCLUSION AN ENDOGENOUS GROWTH MODEL WITH EMBODIED ENERGY-SAVING TECHNICAL CHANGE INTRODUCTION THE MODIFIED ROMER MODEL POLICY IMPLICATIONS CONCLUSION THE CYCLICAL ADVANCEMENT OF DRASTIC TECHNOLOGIES INTRODUCTION THE MODEL THE VERY LONG-RUN CONCLUSION viii

9 4 PHYSICAL SHOCKS ON ECONOMIC STRUCTURE: EARTHQUAKE AND GROWTH INTRODUCTION THE BASICS A THREE-SECTOR GROWTH MODEL Short-Run Equilibrium Long-Run Equilibrium Stability Analysis More on the Transitional Dynamics IMPLICATIONS OF CATASTROPHIC EARTHQUAKES Transitional Implications of an Earthquake on Housing Long-Run Effects of an Earthquake CONCLUSION IS RECOVERY DEFINITE AFTER PHYSICAL SHOCKS? A THEORETICAL ELABORATION INTRODUCTION THE BASICS THE MODEL Restoring Constancy Conditions CONCLUSION EPILOGUE INTRODUCTION A SUMMARY OF FINDINGS HINTS FOR FUTURE RESEARCH ANNEX A ANNEX B ANNEX C ANNEX D ANNEX E ANNEX F 215 ix

10 BIBLIOGRAPHY SAMENVATTING (DUTCH SUMMARY) x

11 List of Tables TABLES 1.1 THE IMPACT OF SHOCKS IN SOLOW FRAMEWORK THE IMPACT OF SHOCKS IN BARRO (1990) THE ASSOCIATION OF CHAPTERS WITH THE REVIEW IMPLICATIONS OF QUALITY IMPROVEMENTS IN HOUSING (MEASURED VIA CHANGES IN BEHAVIORAL VARIABLES) IMPLICATIONS OF QUALITY IMPROVEMENTS IN HOUSING (MEASURED VIA CHANGES IN THE DEPRECIATION RATE) xi

12 List of Figures FIGURES 1.1.a THE CAPITAL PATH b MARGINAL PRODUCTIVITY OF CAPITAL THE NEOCLASSICAL GROWTH MECHANISM TECHNOLOGY SHOCKS IN THE SOLOW FRAMEWORK TECHNOLOGY SHOCKS IN THE AK MECHANISM (IN A SOLOW SETUP) SHOCKS IN THE ENDOGENOUS TECHNOLOGICAL CHANGE SETUP GOVERNMENTAL SHOCKS (IN BARRO (1990) SETUP) THE TIME PLOT OF GROWTH OF FOSSIL FUEL COMPOSITE PRICES AND GDP CUMULATIVE DISTRIBUTION IMPACT OF DRASTIC INNOVATIONS DRASTIC INNOVATION ACTIVITY, THE TURKISH GDP GROWTH RATE, STEADY STATE EQUILIBRIUM THE SUSTAINABLE GROWTH CONE ASSOCIATING INVENTIONS WITH REAL TIME TWO POSSIBLE PATHS OF THE BROADER CONCEPT OF OUTPUT GLOBAL STABILITY IN THE AUGMENTED UZAWA MODEL MARGINAL RESPONSE PATH OF HOUSING TO A CHANGE IN S H MARGINAL RESPONSE PATH OF HOUSING TO A CHANGE IN S I RESTRICTION OF UNDISTURBED VARIABLES D.1 CONVERGENCE WHEN k= D.2 CONVERGENCE WHEN k= D.3 CONVERGENCE WHEN k= xii