One more efficiency test for market economy-Return to Schooling: Does market economy reward education more than communism?

This paper aims to analyze the change in return to schooling in Hungary, via comparing communism and market economy periods. As the philosophy of each system is very different, it causes differences in treatment of factors of production as well. While getting familiar with main literature of this topic, it turns out that there is not consensus about the main driving philosophy of communism in terms of organizing production. There are some contradictory assumptions on rewarding factors of production, especially personal characteristics under planned economy. According to one them, because of egalitarian approach towards workers, wage profiles were compressed and planners set wages on the base of industry and work profile under communism (Campos and Joliffe, (2003)). So personal characteristics like education were not evaluated and that is why after  transition to market economy in ex-communist countries return to education should increase.

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An Estimated DSGE Model For Turkey With A Monetary Regime Change

Abstract

Using of developments of the last decade in Bayesian estimation, I estimate a small open economy Dynamic Stochastic General Equilibrium (DSGE) model for Turkey. The thesis explicitly accounts for a monetary regime change from an exchange rate targeting to an explicit inflation targeting with a flexible exchange rate. In both regimes, I investigate the behavior of the monetary authority and the main driving forces of business cycles of key macro economy variables of the Turkish economy. My results can be summarized as follows. Monetary policy focused on the stabilizing of the nominal exchange rate in the exchange rate targeting regime. But, it is mainly concerned with the price stability in the inflation targeting regime. Monetary policy shocks were the main sources of the fluctuations under both regimes. However, the foreign output shock in the first regime and the real exchange rate shock in the second regime appeared as the additional sources of the fluctuations in the business cycles. The Central Bank of Turkey managed to neutralize inflationary shocks and achieved stability in output and consumption after the regime change.

Keywords: Turkey, Bayesian estimation, DSGE models, regime change


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