The Endogeneity of the Natural Rate of Growth: An Application to Turkey
AbstractThe purpose of this paper is to examine the sensitivity of the Turkish economy’s natural rate of growth to the actual rate of growth, covering the period 1980-2008. To determine the reason why the natural rate of growth is endogenous, the long-run and the causality relationships between real gross domestic product and each of the production factors (labour force and physical capital stock) are investigated with the bounds test. The natural rate of growth for the Turkish economy is found to be at 4.97 percent and it increases approximately 35.6 percent in the boom periods; indicating endogeneity. However, according to the causality test results, the endogeneity of the natural rate of growth may be attributed to the total factor productivity rather than the labour force and physical capital stock. This result is important and the debate on this subject may lead to further studies.
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Bibliographic InfoArticle provided by Savez ekonomista Vojvodine, Novi Sad, Serbia in its journal Panoeconomicus.
Volume (Year): 57 (2010)
Issue (Month): 4 (December)
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Web page: http://www.panoeconomicus.rs/
The natural rate of growth; The endogeneity of the natural rate of growth; ARDL approach; Causality tests;
Find related papers by JEL classification:
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
- E23 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Production
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
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