Efficient Use of Capital: Paradox of Real Estate and Industry in Turkey

Ali Hepsen; Mehmet Asici; Olgun Aydin

doi:10.5539/ijef.v9n8p221

Efficient Use of Capital: Paradox of Real Estate and Industry in Turkey

Abstract

In recent years, one of the hottest debates on Turkish economy is the conflict on resource allocation between real estate and industry sectors. The debate was so intense that ex-minister of Economy Mr. Ali Babacan declared his opinions. Mr. Babacan’s statements about the creation of fixed capital by the private sector is not promising, and private sector fixed capital expenditures are not in the desired level. This situation is due to the limited economic growth and future economic growth. In this study, we have investigated whether Mr. Babacan’s statement is right or not. We have discussed the reliability of the measurement of real estate output as Gruneberg and Folwell did in 2013 and Ruddock did in 2002. That could be concluded that we agree with ex-minister of Economy Mr. Babacan’s comments regarding to imbalances among sectors are threatening Turkish economy’s stability. The imbalances are favoring residential real estate investments and consequently the country is exposed to currency risk.

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DOI:: Digital Object Identifier (open in new tab) 10.5539/ijef.v9n8p221
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Category:: Articles
Type:: artykuły w czasopismach
Published in:: International Journal of Economics and Finance Studies no. 9, pages 221 - 228,
ISSN: 1309-8055
Language:: English
Publication year:: 2017
Bibliographic description:: Hepsen A., Asici M., Aydin O.: Efficient Use of Capital: Paradox of Real Estate and Industry in Turkey// International Journal of Economics and Finance Studies -Vol. 9,iss. 8 (2017), s.221-228
DOI:: Digital Object Identifier (open in new tab) 10.5539/ijef.v9n8p221
Verified by:: Gdańsk University of Technology