PhD Dissertation Defense: Emine Zeren Taşpınar (Economics)

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Faculty of Arts and Social Sciences, PhD Thesis Defense of Emine Zeren Taşpınar (Economics)

ESSAYS IN APPLIED MACROECONOMICS

Dissertation Jury:

Asst. Prof. Remzi Kaygusuz (Dissertation advisor)
Asst. Prof. İnci Gümüş
Asst. Prof. Şerif Aziz Şimşir
Assoc. Prof. Ozan Bakış (Bahcesehir University, Economics)
Asst. Prof. Sadettin Haluk Çitçi (Gebze Technical University, Economics)

Date & Time : June 27, 2016 & 13:30

Place: Sabancı University, Tuzla Campus, FASS 2080

Abstract

Keywords: TFP, cross-country income differences, labor mobility, Turkey, EU, residual wage inequality, incomplete-markets, heterogeneous firms, search and matching frictions, borrowing constraints

This dissertation consists of two chapters each of which investigates different questions in quantitative macroeconomics. In the first chapter, I scrutinize the regional (EU including Turkey) and locational economic implications of removing barriers to labor mobility between Turkey and the EU. I use the growth model with endogenous labor movements developed in Klein and Ventura (2009). I set model parameters so that the model economy is consistent with EU and Turkish economies in 2010. Counterfactual exercises performed by removing barriers to labor mobility, fully and partially, show that gains in regional output in the long-run are at range 6.2%-8% while they are between 6%-8% for the regional capital. Besides, welfare gains for young natives in Turkey are at range 1.06%-2.13%. Yet, young natives in the EU are exposed to welfare losses which changes between 0.08% and 0.16%. In the second chapter, I explore the quantitative role of financial development in the rise of residual wage inequality in the US. I built an incomplete-markets model in which homogenous workers work in firms possessing heterogeneous investment efficiency. Labor and financial markets are frictional. Financial development means that firms are able to borrow more compared to pre-financial development economy. I set model parameters so that the benchmark economy -that is pre-financial development economy- is consistent with the US economy in between 1974Q1-1979Q4. Findings of counterfactual analysis show that variance of wages increase by 2.8% after financial development. However, variance of log-wages decreases by 8.6% suggesting that there is a large increase in average wage as a result of overall improvement in the economy after financial development.