Business cycles analysis of the Turkish industry

Industrial sector is the most important sector in terms of its forward and backward linkages with other sectors and its contributions to gross domestic product, employment, and export. Therefore, business cycles in industry are crucially important. Many economists see business cycles in industry, especially downturn periods, as the economic crises periods. This dissertation examines all aspects of industrial business cycles in terms of causes and consequences.Most of the empirical analyses of business cycles in the Turkish economy are in a macroeconomic framework. This dissertation makes a contribution to the literature by covering a sub-sector of the economy. Business cycles in the Turkish industrial are analyzed by two methods. In the first method, by using output and employment variables we study business cycles in manufacturing, mining, and electricity-gas-water sub-sectors of the industrial sector for the period between 1923 and 2010. In the second method, we study business cycles in the manufacturing sector in more detail on the basis of output gap measure we developed for the period from 1963 to 2010. According to our findings there are 8 cycles in the manufacturing during the period covered. Average duration of the cycle is 6 years. The shortest cycle lasts 3 years 1965?1967, 1988?1990, 1991?1993 ve 2008?2010), while the longest cycles lasts 10 years (1968?1977, 1978?1987 ve 1998?2007). Kitchin and Juglar?s fluctuations observed in the Turkish industry.