BEŞKAYA, Ahmet Bülent Ecevit Üniversitesi - İktisadi ve İdari Bilimler Fakültesi - İktisat Bölümü, Turkey

POLITICAL ECONOMY OF ECONOMIC DISCOMFORT: A TIME SERIES ANALYSIS OF TURKEY, 1980-2010

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The aim of this study is to analyse the impacts of economic and political factors on economic discomfort by using the Turkish annual data for the period of 1980-2010. To measure economic discomfort, we use economic discomfort index (aka “misery index”) defined by Arthur M. Okun as the sum of the unemployment rate plus the annual rate of inflation. We apply for the time series analysis of cointegration and error correction model to examine the relationship between economic discomfort and economic and political factors. As far as the existing literature is considered, our estimations yield disputable results. We find the evidence that, in the short run, economic discomfort increases as income inequality and trade openness increase. However, increasing level of democracy and corruption decreases economic discomfort in the short run. On the other hand, in the long run, all political factors under consideration, except for corruption are positively associated with economic discomfort. Economic (control) variables, namely, GDP growth and interest rate affect positively the economic discomfort both in the long run and in the short run except for interest rate having adverse impact on economic discomfort only in the short run.

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Economic Discomfort Index , Democracy , Corruption , Trade Openness , Income Inequality , Cointegration , Error Correction Model

The International Journal Of Economic and Social Research

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