tailieunhanh - FINANCIAL LIBERALIZATION, MACROECONOMIC (IN)-STABILITY, AND PATTERNS OF DISTRIBUTION

This monograph is about managing our financial wealth in the context of having both human and financial capital. The portfolio that works best tends to hold stocks and bonds as well as insurance products. We are attempting to put these decisions together in a single framework. Thus, we are trying to provide a theoretical foundation—a framework—and practical solutions for developing investment advice for individual investors throughout their lives. In this chapter, we review the traditional investment advice model for individual investors, briefly introduce three additional factors that investors need to consider when making investment decisions, and propose a framework for developing lifetime investment advice for individual investors that expands. | Version December 2001 Comments are welcome TURKEY 1980-2000 FINANCIAL LIBERALIZATION MACROECONOMIC IN -STABILITY AND PATTERNS OF DISTRIBUTION Korkut Boratav Faculty of Political Science Ankara University Ankara Cebeci Turkey Korkut@ Erinc Yeldan Department of Economics Bilkent University Ankara 06533 Turkey yeldane@ CONTENTS Introduction 2 I. Phases of Macroeconomic Adjustment in Turkey 3 I-1. Major Turning Points and the Early Phase 1981-88 9 4 I-2. Capital Account Liberalization and its Consequences 6 I-2a. Increased External Fragility under Financial Liberalization 6 I-2b. The emergence of a new cycle and financial crises 8 I-2b i . The Financial Cycle Dominating the Growth Process 8 I-2b ii . An Anatomy of Financial Crises Turkish-style 10 I-2b iii . Underlying causes of increased external fragility 15 I-2c. Rising Leakages from Non-Residents Inflows 16 I-2c i . Recorded capital flows by residents NKF r NKF nr 16 I-2c ii . Unrecorded capital flows by residents capital flight EO NKF nr 17 I. 2c3. Reserve changes DR NKF nr 17 I- . Arbitrage-Seeking Short-Term Capital Hot Money Flows 19 II. Economics of Macro Adjustment Sources of Aggregate Demand 19 II- 1. Decomposition of the Sources of effective Demand 20 II-2. Deterioration of the Fiscal Balances 21 II- 3. Decomposition over the Fiscal-Real Linkages 23 III. Micro level Adjustments in the Manufacturing Sector 25 III- 1. Phases of Macroeconomic Adjustment in Turkish Manufacturing 26 III-2. Econometric Investigation 27 III-2a. Distributional Indicators Behavior of Gross Profit Margins 29 III-2b. Investment Behavior and Patterns of Accumulation 30 III- 3. Decomposition of Labor Productivity and Employment Patterns in Turkish Manufacturing under External Liberalization 31 IV. Distributive Impacts and The Cost Structure of Value Added 34 IV- 1. Indicators of the Functional Distribution of Income The Evidence 36 IV-2. Decomposition of the Structure of Costs 37 V. Concluding Comments 38 .