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Openness to trade and structural changes in the sources of economic growth and labour demand in Turkey

Author

Listed:
  • Oner Guncavdi

    (Istanbul Technical University)

  • Suat Kucukciftci

    (Istanbul Technical University)

Abstract

Unlike neoclassical expectation behind the structural adjustment programme, some studies for Turkey have showed that the policy change in 1980 caused a decline in employment. Results show that the Turkish industrialisation strategy cannot be regarded as export-led industrialisation strategy. Extra output created by exports has been very limited during the post-liberalisation period. However domestic final demand has continued to be the most dominant determinant of output growth. A surprising result of the paper appears for the period of 1985-1990 when import substitution in final demand created output growth particularly in technology-intensive manufacturing and other manufacturing sectors. However import penetration in final and intermediate goods are important factors creating de-industrialisation in the period of 1990-1996. Despite neoclassical expectations, the reform period after 1982 witnessed large factor substitution against labour, even in the tradable goods sector. Additionally, labour demand also appears to response to output growth less in the post-liberalisation period than before.

Suggested Citation

  • Oner Guncavdi & Suat Kucukciftci, 2011. "Openness to trade and structural changes in the sources of economic growth and labour demand in Turkey," EconoQuantum, Revista de Economia y Finanzas, Universidad de Guadalajara, Centro Universitario de Ciencias Economico Administrativas, Departamento de Metodos Cuantitativos y Maestria en Economia., vol. 8(1), pages 7-34, Julio-Dic.
    • Handle: RePEc:qua:journl:v:8:y:2011:i:1:p:7-34
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    References listed on IDEAS

    as
    1. Jose Miguel Albala-Bertrand, 1999. "Structural Change in Chile: 1960-90," Economic Systems Research, Taylor & Francis Journals, vol. 11(3), pages 301-320.
    2. Erin Yeldan & Kivilcim Metin-…zcan & Ebru Voyvoda, 1999. "Dynamics of Macroeconomic Adjustment in a Globalized Developing Economy : Growth, Accumulation and Distribution, Turkey 1969-1998," Working Papers 9905, Department of Economics, Bilkent University.
    3. Yanikkaya, Halit, 2003. "Trade openness and economic growth: a cross-country empirical investigation," Journal of Development Economics, Elsevier, vol. 72(1), pages 57-89, October.
    4. Erinc Yeldan, 2000. "The Impact of Financial Liberalization and the Rise of Financial Rents on Income Inequality: The Case of Turkey," WIDER Working Paper Series wp-2000-206, World Institute for Development Economic Research (UNU-WIDER).
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    More about this item

    Keywords

    Structural changes; employment; input-output; trade reform; Turkey.;
    All these keywords.

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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