International Conference on Eurasian Economies
11-13 October 2012 – Almaty, KAZAKHSTAN
Paper detail
Paper ID : 569
Status : Paper published
Language : English
Topic : Natural Resources and Environment
Presenter: Ph.D. candidate Nuru Giritli
Session : 3A Energy & Natural Resources
Impact of Decrease in Supply of Land for Domestic use in North Cyprus: Computerized General Equilibrium (CGE) Model Approach
Impact of Decrease in Supply of Land for Domestic use in North Cyprus: Computerized General Equilibrium (CGE) Model Approach
- Ph.D. candidate Nuru Giritli (Eastern Mediterranean University, Cyprus)
- Prof. Dr. Sevin Uğural (Eastern Mediterranean University, TR of Northern Cyprus)
Abstract
Cyprus Island has been divided into two parts since 1974. In April 2003 crossing the Green Line across the borders became possible and both parts of the Island benefited from this; firstly due to resulted domestic tourism in both sides and secondly from new employment opportunities mainly for Turkish Cypriots in South. Besides that, positive expectations over the Cyprus problem accelerated the expenditures in both sides. In the North, demand for land and new dwellings increased, pushing prices upward. Demand for land and a new property by foreigners is busted in recent years. The UK, Israel, Russia and some other countries started to buy land in the North Cyprus by securing resources to their businessmen especially in the areas of Komi Kepir, Kalogrea, Akanthou, Karpass, Risokarpaso, Yialousa and Livera. Such increase in demand by foreigners decreased the supply of land to domestic use. This has many implications on North Cyprus economy which is very small with limited resources in production. In this study, 4- factor, 13-industry a single country general equilibrium model is used to investigate the changes in income, employment, prices, output and inputs required for production resulted from this supply shock. Results show that, under fixed capital and flexible labor market, 10% reduction in land supply increased the value of land by 108.8%, income increased by 2.04 % and prices of skilled labor and capital increased by 1.028% and 1.020% respectively and due to the reduction of land supply, output decreased by 1.53%.
JEL codes: C63, C68
Giritli, Nuru, Uğural, Sevin (2012). "Impact of Decrease in Supply of Land for Domestic use in North Cyprus: Computerized General Equilibrium (CGE) Model Approach" in Proceedings of International Conference of Eurasian Economies 2012, pp.68-75, Almaty, KAZAKHSTAN.
DOI: https://doi.org/10.36880/C03.00569
Session 3A: Energy & Natural Resources
