İktisadi ve İdari Bilimler Fakültesi / Faculty of Economics and Administrative Sciences

Permanent URI for this collectionhttps://hdl.handle.net/11727/1399

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Author: search.filters.author.Kantur, Zeynepsearch.filters.applied.f.publicationcategory: search.filters.publicationcategory.Makale - Uluslararası Hakemli Dergi

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    A new Keynesian model with unemployment: The effect of on-the-job search
    (2021) Kantur, Zeynep; Keskin, Kerim; https://orcid.org/0000-0002-5756-6457
    Although new Keynesian models with labor market frictions report an increase in unemployment and a decrease in labor market tightness in response to a positive technology shock, which appears to be in line with recent empirical findings, the volatilities of these variables are not as high as their empirical counterparts. This calls for the introduction of new modeling tools to amplify the volatilities of the unemployment rate and labor market tightness. Along this line, this paper contributes to the theoretical literature by studying the effect of employment-to-employment flow in a new Keynesian model with labor market frictions. We consider two types of firms that offer different wage levels, which incentivize low-paid agents to search on the job. Differently from the existing literature, the main source of wage dispersion is the difference between firms' bargaining powers. The proposed model generates a higher volatility of unemployment and labor market tightness in response to a positive technology shock compared to the model without on-the-job search, without causing a significant change in the responses of other variables.
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    What pandemic inflation tells: Old habits die hard
    (2021) Kantur, Zeynep; Ozcan, Gulserim; 0000-0002-5756-6457
    COVID-19 has led to changes in individuals' consumption habits, which will cause the calculation of inflation based on the average consumption basket to give distorted information. Using debit and credit card spending data of Turkey, we build CPI weights and compute an alternative pandemic consumption basket price index for Jan 2020-Feb 2021. Our findings show that the pandemic inflation is higher than the official inflation rate during the first lockdown, suggesting a behavioral change in consumption. However, in the reopening period, old habits come back. During the second lockdown, the difference between the pandemic and the official inflation rates is trivial in comparison with the first lockdown. (C) 2021 Elsevier B.V. All rights reserved.
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    Card spending dynamics in Turkey during the COVID-19 pandemic
    (2021) Kantur, Zeynep; Ozcan, Gulserim; 0000-0002-5756-6457
    This paper provides an extensive analysis of card spending during the COVID-19 pandemic in Turkey by using weekly aggregated and sectoral credit and debit card spending data from March 2014 to December 2020. At an aggregated level, we show that aggregate demand decreases significantly at the early stages of COVID-19 and seems to reinstate its pre-COVID trend. However, when we include the pre-existing conditions of Turkey, the 2018 currency crisis, we observe that the recovery in demand is not that strong. To highlight the underlying reasons for structural change in aggregate demand, we estimate the model with stringency index and unemployment-related search index. The estimated model indicates that containment measures and restrictions and fear of job/income loss mainly explain the overall impact of COVID-19 on aggregate demand. We also examined sectoral data to understand aggregate demand dynamics better. Only stable and delayable sector groups have reached a trend above their pre-pandemic trajectories. However, the social and work-related sectors are far from their respective pre-pandemic trend. (C) 2021 The Authors. Published by Elsevier B.V. on behalf of Central Bank of The Republic of Turkey.
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    Dissecting Turkish inflation: theory, fact, and illusion
    (2021) Kantur, Zeynep; Ozcan, Gulserim; 0000-0002-5756-6457
    The policy debate in Turkey over the impact of interest rate on inflation concerns the question of what policymakers should do when faced with volatile and high inflation. Motivated by this discussion, we provide an empirical analysis by connecting the cost channel to the Phillips relation. Our findings prove the existence of the cost channel. However, other determinants of inflation -labor share of income, prices of imported inputs, and consumption goods -dominate the cost channel in Turkey.
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    Model Uncertainty and Financial Frictions: Implications for Optimal Monetary Policy
    (2021) Kantur, Zeynep
    The last decades proved that policymaking without considering uncertainty is impracticable. In an environment of uncertainty, policymakers have doubts about the policy models they routinely use. This paper focuses specifically on the situation where uncertainty on the financial side of the economy leads to misspecification in the policy model. We describe a coherent strategy for policymakers who are averse to model misspecification and analyze optimal policy design in the face of Knightian uncertainty. To do so, we augment a financial dynamic stochastic general equilibrium model with model misspecification in a simple minimax framework where the central bank plays a zero-sum game versus a hypothetical evil agent. The policy is tailored to insure against the worst-case outcomes. We show that model ambiguity on the financial side requires a passive monetary policy stance. However, if the uncertainty originates from the supply side of the economy, an aggressive response of interest rate is required. We also show the impact of an additional macroprudential tool on the dynamics of the economy.