Table B1: Time series used in model estimation

|Real Total Gross Domestic Product, quarterly (demeaned growth rate)|
|---|
|Real Private Final Consumption Expenditure, quarterly (demeaned growth rate)|
|Real Gross Fixed Capital Formation, quarterly (demeaned growth rate)|
|Real Government Final Consumption Expenditure, quarterly (demeaned growth rate)|
|Real Exports of Goods and Services, quarterly (demeaned growth rate)|
|Real Imports of Goods and Services, quarterly (demeaned growth rate)|
|Real public investment expenditure, quarterly (demeaned growth rate)|
|Real private investment expenditure, quarterly (demeaned growth rate)|
|Rate of capacity utilization, quarterly (demeaned)|
|Gross Domestic Product defator infation, quarterly (double-sided HP fltered)|
|Harmonized Index of Consumer Prices: Overall Index Excluding Energy, quarterly (demeaned growth rate)|
|Harmonized Index of Consumer Prices: Energy, quarterly (demeaned growth rate)|
|Employment rate: number of people employed/total labor force, quarterly (double-sided HP fltered)|
|Real compensation of employees, quarterly (demeaned growth rate)|
|Total Hours worked, quarterly (demeaned growth rate)|
|Low-skilled hourly wage infation, quarterly (double-sided HP fltered)|
|High-skilled hourly wage infation, quarterly (double-sided HP fltered)<br>Discount rate, quarterly (double-sided HP fltered)|
|3-month short-term interest rate, quarterly (double-sided HP fltered)|
|Real Broad Efective Exchange Rate, quarterly (double-sided HP fltered)|
|Total fnal household (residential+public+half of transportation) energy consumption, annual (demeaned growth rate)|
|Total fnal frm (industry+half of transportation) energy consumption, annual (demeaned growth rate)|
|Renewable energy supply, annual (demeaned growth rate)|
|Fossil energy supply, annual (demeaned growth rate)<br>CO2 emissions, annual (demeaned growth rate)|
|Domestic fossil fuel producer prices, quarterly (demeaned growth rate)|
|OECD fossil fuel producer prices, quarterly (demeaned growth rate)|
|European Union Real Gross Domestic Product per capita, quarterly (demeaned growth rate)|
|European Union Gross Domestic Product defator infation, quarterly (double-sided HP fltered)|
|European Union export price defator, quarterly (demeaned growth rate)<br>Euro Area 10-year government bond interest rate, quarterly (double-sided HP fltered)|

# **B.2 Empirical model parametrization**

Tables B2 and B3 provide all relevant information regarding the calibration. They list every model parameter including a brief description. They report the calibrated values and how we came up with them: calibrated, or restricted.

A set of parameters have been restricted in order for a set of related variables to match their empirical counterparts.<sup>25</sup> Typically, parameters have been restricted which have strong effects on the steady state but not so much on the transitional dynamics. To give one example, the consumption demand scaling parameter is restricted to ensure that GDP is equal to one at the steady state. Then, the steady states of many other variables have straightforward interpretations. To give another example, we know from the data that the ratio between renewable and fossil energy is around 0 _._ 2 in T ̈urkiye. Hence, we restrict the

> 25For the estimation, a parameter restriction implies that the affected parameter is adjusted in every iteration of the sequential estimation procedure in order to uphold the restriction. As the Bayesian algorithm travels the parameter space to assess how likely certain parameter values are the restricted parameters are updated every step of the way.

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