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Macroeconomic Instability, Capital Accumulation and Growth : The Case of Turkey 1963-1999

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  • Mustafa Ismihan
  • Aysit Tansel
  • Kivilcim Metin-Ozcan

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Abstract

This study investigates the empirical relationships between macroeconomic instability, capital accumulation and growth in Turkey over the period 1963-1999. We use recent time series econometric techniques, such as cointegration and impulse response analysis, to analyze empirical relationships between the variables of interest. The results of this paper suggest that the chronic and increasing macroeconomic instability of the Turkish economy has seriously affected the capital formation and hence growth. Furthermore, chronic macroeconomic instability seems to become a serious impediment to the public investment, especially its infrastructural component, and shattered or, even reversed the complementarity between public and private investment in the long-run. Therefore, Turkish experience has shown that macroeconomic instability not only hinders economic growth but it could also reverse the complementarity between public and private investment in the long-run.

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Bibliographic Info

Paper provided by Bilkent University, Department of Economics in its series Departmental Working Papers with number 0205.

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Date of creation: 2002
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Handle: RePEc:bil:bilpap:0205

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Postal: 06533 Ankara
Phone: +90(312) 266-4807
Fax: +90(312) 266-5140
Web page: http://econ.bilkent.edu.tr/
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Keywords: Public investment; Private investment; Complementarity; Macroeconomic Instability;

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Citations

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Cited by:
  1. Demir, Firat, 2006. "Volatility of short term capital flows and socio-political instability in Argentina, Mexico and Turkey," MPRA Paper 1943, University Library of Munich, Germany.
  2. Secil Pacaci Elitok & Al Campbell, 2008. "The Balance of Payments as a Constraint on Turkey’s Growth: 1960-2004," Working Paper Series, Department of Economics, University of Utah 2008_13, University of Utah, Department of Economics.
  3. Göktaylar, Yavuz, 2011. "The rise of independent administrative authorities in Turkey: A close look on sources, successes and challenges of this new institutional transformation," 22nd European Regional ITS Conference, Budapest 2011: Innovative ICT Applications - Emerging Regulatory, Economic and Policy Issues 52154, International Telecommunications Society (ITS).

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