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271. Analysis of Istanbul Stock Market Returns Volatility with ARCH and GARCH Models

Author:
İpek M. Yurttagüler
Publication Date:
01-2024
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
In today’s world where globalization is intensely experienced, differences in risk perception, developments in capital markets, and the negativities faced in the markets due to uncertainty are very important when researching the structures of the stock markets, and therefore determining current volatilities. One of the biggest problems encountered is the inability to price stocks effectively. Therefore, estimating and modeling volatility becomes crucial. The diversity of the portfolio, created by international investors in the financial markets and the sustainability of their investment decisions, are closely related to the volatility variable. However, the fact that financial markets are more fragile in developing countries increases the importance of volatility. There are many different methods in the literature when estimating volatility. Due to the inadequacy of traditional time series models in estimating volatility, conditional heteroskedasticity models are used with ARCH and GARCH class models being frequently used. In this study, the series of daily opening values of the ISE100 Index covering from 02.01.2003 to 30.09.2022 was estimated using ARCH/GARCH models for volatility with the aim to determine which model has the higher explanatory power. According to the findings, the GARCH(1,1) model gave more meaningful results in explaining the ISE100 return volatility.
Topic:
Economics, Globalization, Stock Markets, and Volatility
Political Geography:
Turkey and Middle East

272. Decoding Inflation: Role of Institutional Quality in Türkiye Using Advanced Econometric Techniques

Author:
Yıldırım Beyazıt Çiçen
Publication Date:
01-2024
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
Persistent inflation remains a significant economic challenge in Türkiye. The causes of high inflation have been examined through various factors, including supply and demand, as well as monetary and fiscal policies. However, few studies have included institutional factors in their analyses. The objective of this study is to determine whether institutional quality affects inflation in Türkiye. A novel and robust econometric analysis method is employed in this study. Between 2005 and 2019, the inflation rate, the International Country Risk Guide’s (ICRG) Political Risk Rating index, which measures the quality of institutional structure, and the changes in currency exchange rate basket variables in Türkiye were examined using the Fourier KPSS stationarity test and the Fourier Shin cointegration test. The results of the analysis indicate that inflation rate is co-integrated with institutional quality. The deterioration of institutional quality in Türkiye between 2005 and 2019 has been associated with an increase in inflation. While the implicit inflation targeting period in the inflation targeting regime implemented in Türkiye after 2002 was relatively successful, the explicit inflation targeting period failed to reduce inflation. The primary reason for the inability to achieve the specified inflation targets during these periods is the deterioration in the quality of institutions. It is also important to note that central bank independence is not immune to political influence and is one of the most important factors affecting inflation targeting.
Topic:
Institutions, Inflation, Central Bank, and Econometrics
Political Geography:
Turkey and Middle East

273. Populism and Income Inequality: Is Income Inequality in Türkiye a Political Choice?

Author:
Dila Asfuroğlu
Publication Date:
06-2024
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
The argument that national inequalities are political and thereby driven by political decisions implies that income distribution is not merely an economic phenomenon but also a political one. Hence, this study explores the impact of populist governance on income inequality in Türkiye. In doing so, this study addresses whether income inequality in Türkiye is a political choice, drawing on economic, social, and political data over the years 2008- 2022. According to the results of the quantitative analysis, the share of income for the working class has fallen, the income gap between the lowest and highest deciles of the working class has narrowed, and the potential for fiscal interventions to reduce income inequality is not realised. In return, the income inequality that existed in 2008 has persisted at the same magnitude over the years. In other words, even if income inequality is not an explicit political choice, the populist governance in Türkiye between 2008 and 2022 has chosen not to contribute to the solution to this prevailing inequality.
Topic:
Economics, Politics, Income Inequality, and Populism
Political Geography:
Turkey and Middle East

274. Did the February 6-7 Türkiye Earthquake Trigger a Housing Market Bubble? Empirical Insights from Right-tailed Unit-root Tests

Author:
Gökhan Kartal
Publication Date:
06-2024
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
This study primarily aims to assess whether the destructive earthquakes of February 6-7, 2023 triggered a potential nationwide housing market bubble. Spanning the period from January 2010 to September 2024, the analysis employs Generalised Supremum Augmented Dickey-Fuller and Backward Supremum Augmented Dickey-Fuller methods to identify bubble formations. The findings reveal significant bubble periods, including January to August 2015, November 2015 to November 2016, May 2018 to January 2019, May to June 2019, and February to December 2023. The latest bubble formation occurred immediately after the earthquake, highlighting a strong link between the disaster and housing market dynamics. While the earthquake’s impact—through abrupt housing stock loss, large-scale displacement, and intensified demand for secure housing—was undeniably a crucial trigger for this bubble, other macroeconomic factors, such as inflationary pressures, low interest rates, and the perception of housing as a lucrative investment, also played a reinforcing role. The Türkiye experience enhances the understanding of speculative cycles in seismic regions, demonstrating how non-economic shocks such as earthquakes can rapidly boost demand and strain housing supply, amplifying speculative behaviour. This bubble, which peaked in May 2023 and gradually deflated, completely dissipated by December 2023. This development can be associated with the policies implemented by economic authorities, including interest rate hikes, restrictive credit measures, as well as the normalisation of conditions across the country following the earthquake. This highlights the need for proactive monitoring and intervention by economic authorities through appropriate economic policies and regulations to address supply-demand imbalances and mitigate the risks of future housing bubbles, particularly in response to external shocks. Furthermore, in response to the study’s findings on earthquake-triggered bubbles, policymakers should prioritise initiatives aimed at strengthening building infrastructure and implementing urban transformation strategies.
Topic:
Economics, Natural Disasters, Earthquake, Speculative Bubbles, and Housing Market
Political Geography:
Turkey and Middle East

275. Determinants of Ecological Footprint in Türkiye: Evidence from the Fourier ARDL Bounds Test Approach

Author:
Mustafa Torun, Cüneyt Kılıç, Ahmet Tayfur Akcan, and Müşerref Arık
Publication Date:
06-2024
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
Ecological footprint calculations evaluate sustainability by examining natural resources. The ecological footprint obtained by calculating the number of natural resources per person provides information about the amount of waste produced as well as the natural resources consumed and examines the sustainability of living conditions in the world in this respect. The ecological footprint is one of the frequently encountered topics in the literature in terms of the analysis of environmental impacts. This study examines the factors influencing the Ecological Footprint in Turkey. Using annual data between 1980 and 2018, the relationship of renewable energy consumption, human capital and urbanization variables to the Ecological Footprint is examined. The Fractional Fourier Augmented Dickey Fuller Unit Root Test and the Fourier Autoregressive Distributed Lag Bound Test is used in the study. There is a statistically significant relationship between the renewable energy, human capital and urbanization variables and the Ecological Footprint. When the outputs obtained in the study are examined, it is seen that the variables affect the ecological footprint. The increased value of these variables can be used to explain why the Ecological Footprint increased. Increasing industrial activities due to globalization and technological developments, increasing vehicle traffic in cities due to population growth, unplanned urbanization and destruction of green areas due to the sheltering needs of the increasing population, inability of recycling facilities to adapt to the increasing population and unplanned waste management, etc. factors can increase the ecological footprint. However, as urbanization increases, if a correct plan is drawn by taking these factors into consideration, the negative correlation between the ecological footprint and urbanization can be explained. Within the determined plan; Wastewater management, protection of green areas, prevention of unplanned urbanization and efficient use of resources are explanatory at this point. The empirical findings have important policy implications. According to these policy implications, to offset the effects on the ecological footprint, educational activities to raise environmental awareness and adopt energy-efficient lifestyles should be given due importance, various incentives and supports should be implemented and a green-based lifestyle.
Topic:
Economics, Natural Resources, Renewable Energy, Ecology, and Consumption
Political Geography:
Turkey and Middle East

276. Aspects of Employment in Ottoman Waqfs Examples of Fatih, Yavuz Selim, and Süleymaniye Waqfs

Author:
Ayşenur Karademir
Publication Date:
06-2024
Content Type:
Journal Article
Journal:
Istanbul Journal of Economics
Institution:
Istanbul University Faculty of Economics
Abstract:
This study examines the role of Ottoman imperial waqfs as employment institutions, focusing on the salary register EV.HMH.1178, prepared for the Fatih, Yavuz Selim, and Süleymaniye waqfs in the early 18th century. By analyzing the administrative and financial oversight documented in this register, the article explores the redistributive functions of these waqfs and their contribution to sustaining long-term social and economic stability. Special attention is given to the intervention of the central office (Sadr-ı Âli Nezareti/Grand Vizier’s Office) through an imperial decree and the classification of employee roles by workplace. This research contributes to the literature on waqfs by providing insights into their employment systems and administrative practices.
Topic:
Economics, History, Employment, Ottoman Empire, and Waqf
Political Geography:
Turkey and Middle East

277. The Roots of Mistrust in Coalition Building among Syrian Nonprofits: Lessons from the Truth and Justice Charter

Author:
Marianna Al-Tabba
Publication Date:
12-2024
Content Type:
Special Report
Institution:
Arab Reform Initiative (ARI)
Abstract:
For the past 13 years, the establishment and management of alliances in Syria have not been one of the pillars of public affairs work, whether in political, relief, or human rights work, and the field of transitional justice is no exception. Despite the harmony of the parties in vision, goal, or even ideology – and their shared struggles whether political, revolutionary, or any other form – a lack of trust between groups often surfaced, hindering the formation of strong and strategic relationships and delaying the unification of their ranks at a time of great need. This paper attempts to investigate and explore the extent to which lack of trust affects the formation of alliances as perceived by actors in the Syrian public sphere. It examines the nature of the existing relationships between Syrian institutions and organizations and their ability to build alliances around a specific demand or cause that unites them. Due to the overlapping factors and different schools of thought in explaining the emergence and success of different forms of institutional cooperation and their gradations, the paper focuses on one crucial determinant in building strategic cooperation and alliances: trust. It raises a general question about the causes of weak trust between organizations working in the public sphere; its impact on collective action; and the lessons learned to overcome the obstacle of weak trust, focusing on nonprofit organizations working in the field of transitional justice and the movements by victims’ families and survivors. The importance of the topic emerges not only in understanding the causes and deconstructing the lack of trust, or mistrust, among Syrian public affairs workers, and the impact of this on building strong relationships and alliances based on deep trust among its members – something that is desperately needed at the political, human rights, and civil work levels in general. Its importance also emerges from the lessons learned from a previous experience in contemporary Syrian history – a coalition of Syrian associations and institutions that built high levels of trust among themselves. This paper emphasizes the ability of Syrian men and women to create a demanding grassroots movement around the issue of detention and enforced disappearance, a movement that is geographically widespread, driven by the people themselves and prominent women leaders.
Topic:
Civil Society, Coalition, and Trust-building
Political Geography:
Middle East and Syria

278. Can Poverty Graduation Programs Truly Free the Poor from Poverty? Reflections on International and Regional Experiences

Author:
Howaida Adly Roman
Publication Date:
10-2024
Content Type:
Special Report
Institution:
Arab Reform Initiative (ARI)
Abstract:
Poverty is an intractable structural issue, which raises a question that has been perplexing for many years: Why have multiple efforts to combat poverty not liberated the poor from its bond and captivity, allowing them the freedom of sufficiency and human dignity? Does the reason lie in the inadequacy of these efforts, or because the efforts did not address the issue of poverty from its structural causes, instead only dealing with its symptoms? The reasons for questioning this issue are varied. This uncertainty has led to the emergence of a new type of intervention that has been tested initially on limited populations, known as the “graduation out of poverty” approach. This approach was motivated by the recognition in the late 1990s that traditional poverty reduction and microfinance programs could not reach the poorest because, in addition to the barrier of income marginalization, the poor face multidimensional social, economic, and political poverty, as well as psychological and cultural barriers.1 Poverty graduation programs offer an integrated package of interventions aimed at lifting the poor out of their situation and ensuring the sustainability of their emancipation over a specific time, ranging from 24 to 36 months. In 2002, the Bangladesh Rural Advancement Committee (BRAC) developed a program to target the poorest of the poor to free them from their situation and ensure sustainable livelihoods.2 BRAC is a non-governmental organization founded in 1972; its work continued until 2001 when it expanded to include many other countries in the global south, applying its experience in poverty alleviation and establishing branches in many other countries.3 The interventions of these programs seek to combine addressing the immediate needs of those targeted with long-term investment in technical skills, life skills, asset transfer, entrepreneurial development, promoting savings opportunities, and planning for the future to ensure a sustainable exit from poverty and a stable life for these social groups.4 This paper aims to examine poverty exit programs that have been implemented in diverse social, economic, and cultural contexts around the world to draw key conclusions about the ability of these programs to deal with the root causes of poverty and vulnerability. The paper also seeks to investigate the extent to which these programs are scalable, meaning that they can be applied to larger populations; their sustainability; and the guarantee that the poor will not fall back into poverty. The paper focuses on analyzing three experiences from the Arab region, two from Egypt and one from Yemen. Yemen’s program, which is the earliest in the region, dates back to 2006 when the Consultative Group to Assist the Poor (CGAP) and the Ford Foundation decided to expand the approaches to graduation out of poverty through various contexts. In Egypt, the Bab Amal program was implemented by a group of NGOs, while the Forsa program was a government program for graduating beneficiaries of conditional cash transfers (CCT) – the Takaful program – that was implemented in partnership between the Ministry of Social Solidarity and NGOs. Bab Amal was started earlier and has undergone preliminary evaluations, while Forsa is still in its infancy. Research into global poverty graduation programs may help these two experiments avoid making similar mistakes, especially in the context of scaling up. Based on the above, this paper will shed light on what poverty graduation programs are, how they emerged and for what reasons, what role NGOs played, how governments began to adopt these programs and apply them and later expand them, and what the challenges and issues of expansion are. The paper concludes by analyzing a number of challenges facing these programs – chief among them of course the challenge of sustainability – and finally, the lessons learned.
Topic:
Development, Poverty, Economic Inequality, and Social Programs
Political Geography:
Middle East, Yemen, North Africa, and Egypt

279. Lebanon's Social Protection System Suffers Amidst the Current War: Urgent Action Needed!

Author:
Cynthia Saghir, Farah Al Shami, and Diana Tonea
Publication Date:
10-2024
Content Type:
Special Report
Institution:
Arab Reform Initiative (ARI)
Abstract:
This policy paper assesses Lebanon’s social protection response to the ongoing war and provides recommendations for policymakers to further develop this response and later improve the shock-responsiveness and -resilience of the country’s social protection system. The war in Lebanon has exacerbated the existing economic crisis, leading to mass displacement and increased poverty. The social protection system, already fragmented and underfunded, is struggling to meet the humanitarian needs of the affected population. The emergency response has been inadequate and limited to cash transfers and in-kind donations reaching only a small portion of those in need. Lebanon’s social protection system primarily relies on poverty-targeted social safety nets, which offer limited coverage and are heavily dependent on international funding. These safety nets have been expanded in response to the war but their reach remains relatively narrow. This implies an urgent need for a more comprehensive and coordinated approach to address the crisis – an approach that involves immediate humanitarian assistance as well as longer-term social protection measures that strengthen the system’s shock-responsiveness and -resilience. Linkages between the humanitarian and social assistance systems are also crucial for an integrated and sustainable approach. The paper concludes that for Lebanon's social protection system to become more fit for purpose, universal social security schemes should be prioritized, followed by a plan that tackles the issue of being composed of a complex web of different programs and registries. The government must therefore take decisive action to secure additional funding through domestic resources, improve coordination among stakeholders, and expand the reach of social assistance programs so that vulnerable populations receive the support they need to cope with the current crisis, and have their wellbeing and livelihood constantly protected.
Topic:
Humanitarian Aid, Conflict, and Social Protection
Political Geography:
Middle East and Lebanon

280. The Role of Community-Based Associations in Social Protection: Jordan as a Case Study

Author:
Mohammed Bani Amer
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
In Jordan, the contributory and non-contributory social protection systems are some of the most important tools of the state and society for promoting social cohesion and addressing the risks that people face in their lives, such as sickness, death, old age, disability, and unemployment. The legislative structure in Jordan attempts to organize the work of all parties concerned with social protection through social security laws and national relief funds, in addition to regulating the roles, objectives, competencies, scope, and governance of charitable associations, which are one of the tools of civil society, to enhance the country’s social protection and strengthen its resilience to risks. This paper discusses the role of cooperatives and community-based associations in Jordan in strengthening the social protection system, examining the positive aspects and challenges through research questions based on the following key questions: Are these associations effective, efficient, and able to fulfill their vision, mission, and goals, or are they ineffective and suffering from issues and challenges that make their role marginal and ineffective? Does the existence of these associations and their encouragement by the state harm the official social protection system, and encourage people to evade the official social protection system and contribution payments given the existence of other forms of protection; and does this result in the state abdicating its responsibilities to these other entities, regardless of whether they create or reproduce negative phenomena and dynamics? This paper emphasizes that reaching a scientific judgment on the NGO sector, in general, requires a comprehensive study of a representative sample of all sectors and types of these associations, taking into account their size, the scope of their work, sources and amount of funding, work strategies, outreach, and other factors. This paper uses the methodology of qualitative analysis and addresses this issue by defining its scope to include two associations: Tkiyet Um Ali, one of the most important associations in Jordan, is based in the capital Amman and has several activities directly related to strengthening the social protection system in Jordan extending to all governorates; and the Arhaba Charitable Society, located in the outskirts of Irbid governorate in northern Jordan, with a specific geographical scope. These two associations will help us to build perceptions and scientific judgments to enable judging the NGO sector and its effectiveness in promoting and contributing to social protection.
Topic:
Civil Society, Community Initiatives, and Social Protection
Political Geography:
Middle East and Jordan