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Not-quite-great depressions of Turkey: A quantitative analysis of economic growth over 1968–2004

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  • Çiçek, Deniz
  • Elgin, Ceyhun

Abstract

Following the great depressions methodology suggested by Kehoe and Prescott (2002, 2007), we use growth accounting and perfect foresight dynamic general equilibrium models to study growth performance of Turkey from 1968 to 2004. Our benchmark model without any frictions and taxes accounts for 86% of the observed change in the growth rate of GDP per-working age person and once we extend the model with taxes and capital adjustment costs it accounts for 60% of the observed reduction in hours worked per-working age person and 35% of the change in the growth of capital-output ratio. Also, we identify that the Turkish economy experienced a depression from 1976 to 1984 and the extended model performs remarkably well to account for the depression period. Our findings generally suggest that rigidities affecting capital accumulation and government policies using distortionary taxes have a crucial role in the evolution of various variables of the Turkish economy.

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  • Çiçek, Deniz & Elgin, Ceyhun, 2011. "Not-quite-great depressions of Turkey: A quantitative analysis of economic growth over 1968–2004," Economic Modelling, Elsevier, vol. 28(6), pages 2691-2700.
    • Handle: RePEc:eee:ecmode:v:28:y:2011:i:6:p:2691-2700
    DOI: 10.1016/j.econmod.2011.08.010
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    Cited by:

    1. Üngör, Murat, 2014. "Some thought experiments on the changes in labor supply in Turkey," Economic Modelling, Elsevier, vol. 39(C), pages 265-272.
    2. Elgin, Ceyhun & Yucel, Emekcan, 2014. "Determinants of the weight for leisure in preferences," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-26.
    3. Murat Üngör & M. Koray Kalafatcılar, 2014. "Productivity, Demographics, and Growth in Turkey: 2004-12," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 3(1), pages 23-56, January.
    4. Murat Üngör, 2016. "Did the rising importance of services decelerate overall productivity improvement of Turkey during 2002–2007?," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 19(3), pages 238-261, July.
    5. Orhan Erem Atesagaoglu & Ceyhun Elgin & Oguz Oztunali, 2017. "TFP growth in Turkey revisited: The effect of informal sector," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 17(1), pages 1-11–17.
    6. Ceyhun ELGİN & Tolga Umut KUZUBAŞ, 2012. "Wage-Productivity Gap in Turkish Manufacturing Sector," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 27(316), pages 09-31.
    7. Ceyhun Elgin & Oğuz Öztunalı, 2014. "Environmental Kuznets Curve for the Informal Sector of Turkey (1950-2009)," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 61(4), pages 471-485.
    8. Attar, M. Aykut, 2021. "Growth, distribution and dynamic inefficiency in Turkey: An analysis of the naïve neoclassical theory of capital," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 20-30.
    9. Dalton, John T., 2015. "The Evolution Of Taxes And Hours Worked In Austria, 1970–2005," Macroeconomic Dynamics, Cambridge University Press, vol. 19(8), pages 1800-1815, December.
    10. Attar, M. Aykut, 2013. "Growth and Demography in Turkey: Economic History vs. Pro-Natalist Rhetoric," MPRA Paper 47275, University Library of Munich, Germany.
    11. M. Aykut Attar, 2018. "Economic Development in Turkey and South Korea: A Comparative Analysis," Bogazici Journal, Review of Social, Economic and Administrative Studies, Bogazici University, Department of Economics, vol. 32(1), pages 1-28.

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