Author:
Akkina Krishna Rao,Celebi Mehmet Ali
Abstract
The purpose of this study is to analyse the determinants of
private fixed investment spending in Turkey over the period 1970-96,
which covers years of both financial repression and financial
liberalisation. A reformulated neoclassical investment model and a
reformulated flexible accelerator investment model have been tested for
the Turkish economy. The results obtained support the accelerator
principle and the crowding out hypothesis, that is, public and private
sector investments have been found to be substitutes. Furthermore, the
hypothesis that the volume of funds is as important as the cost of funds
used in financing private fixed investment has been verified. On the
other hand, the so-called McKinnon-Shaw hypothesis has not been
completely verified because the effect of the medium-term real lending
rate on private fixed investment has been found to be negative but
statistically insignificant. Finally, the financial and liberalisation
programmes that have been implemented since 1983 have not yet shown any
noticeable positive effects on private investment.
Publisher
Pakistan Institute of Development Economics (PIDE)
Subject
Development,Geography, Planning and Development
Cited by
16 articles.
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