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The Turkish social insurance system has been feverishly debated for years, particularly through its burden on the economy. The most recent reform is an attempt to neutralize the deterioration within the social security system and its effects on the economy. After the recent reform, ‘the way that retirement benefits are calculated’ is changed unfavorably for workers and the minimum age for retirement is increased. In particular, for an agent with 25 years of social security tax payments, the replacement rate is down from 65 percent to 50 percent. On the other hand, retirement age is up from 60 to 65. The aim of this paper is to investigate the macroeconomic effects of these changes using an OLG model. The author’s findings indicate that labor supply, output and capital stock increase when changes above are applied to the benchmark economy calibrated to the Turkish economy data in 2005. A critical change with the current reform is that the marginal benefit of working has become uniform over ages. In a simulation exercise, the marginal retirement benefit in the benchmark economy is changed to be uniform over ages while keeping the size of social security system unchanged. As a result, the benefit of retiring at a later period increases. However, uniform distribution of the marginal benefits itself decreases both the capital stock and output of the economy. Increasing the retirement age has positive effects on the economy since agents obtain retirement benefits for fewer years and at an older age.

This work investigates convergence among regions of Turkey with neoclassical exogenous growth perspective. According to results, it can be stated that there is a tendency of convergence among the regions of Turkey. However, there is an important crisis (2008 crisis) in the investigation period of this study in which the tendency of convergence increases. Besides, descriptive statistics show that during the crisis, the speed of convergence increases, however, apart from crisis and post-crisis, excess capacity periods it is impossible to state that there is convergence among regions of Turkey. On the other side, descriptive statistics show that periods without economic crisis also do not indicate divergence. Therefore, it cannot be stated that there is divergence or convergence among regions of Turkey for the investigation period of this study but the main conclusion is that crisis has a positive impact with respect to closing income differences among regions.

This paper examines the relationship between the lobbying power of different interest groups and public education spending in a panel data estimation during the period 1996-2009 for 132 countries. The resource rents, manufacture exports, and agriculture value added are used as proxy variables for the lobbying power of the natural resource owners, manufacturers, and landowners, respectively, in order to substantiate the definition of the lobbying power of the interest groups more with economic fundamentals. As lobbying power is mediated through political institutions, different governance indicators are used individually and in interaction terms with the proxy variables in the estimations. It is found that when the country is more politically stable and the more the rule of law applies, the negative (positive) effect of the lobbying power of natural resource owners (manufacturers) on public education spending intensifies. The negative effect of landowners’ lobbying power diminishes as institutional quality as measured by governance indicators improves.    

Although Turkey has historically concentrated its trade with the European Union (EU) it has diversified its trade markets with the neighbouring regions and different group of countries during the last decade. Among them, Arab countries have come into prominence. Especially, following the “zero problems with neighbours” policy (ZPN), pursued by Turkey since 2002, the trade volume with the Middle Eastern neighbours has increased faster than that with its traditional partners. Nevertheless so called “Arab Spring” has started to manifest its effects on this trend. It deteriorates not only the economies of the concerned countries but also Turkey’s trade expansion. This paper aims: (i) to test through a gravity model the positive impacts of the ZPN policy and the negative impact of the Arab Spring on the trade expansion with the Spring Countries; and (ii) to reveal the positive impact of the policy change and the negative impact of the uprising movements on the realization of trade potential by Turkey in the Spring Countries.