Explosive construction in a micro-state: environmental limit and the Bon curve: evidence from North Cyprus

Abstract

The dynamo role of the construction sector in North Cyprus is documented on the basis of an empirical estimation of backward and forward linkages during the period 1998 to 2005. This was a period when the North Cyprus economy experienced an economic boom in the aftermath of the UN Peace Plan known as the Annan Plan for settling the Cyprus problem. The latest input-output table for the North Cyprus economy is 1998 and we had to derive backward and forward linkages for 2005 from a detailed breakdown of inter-industry transactions per unit of construction output using the most significant purchases and deliveries, normalizing these transactions for comparability between 2005 and 1998. The results reflect radically different pattern of inter-industry transactions in 2005 compared to 1998. This work also has general interest in highlighting the possibility of a modified Bon curve for micro-states, such as North Cyprus, in which environmental constraints may be encountered earlier implying an inverted V-shaped Bon curve in place of an inverted U-shape.