Turkey is the only founding member of the OECD that has not converged to the US in terms of per-capita GDP since 1950: its real GDP per capita is stuck at 20% of that of the US. At a proximate level, we show that Turkey's relative stagnation over the past 50 years is due to: (1) the relative decline in its labor force participation, and (2) the relative stagnation of its TFP. We argue that the first fact is due to policies of high personal income taxation, and high social security contributions for both employees and employers. The second fact we argue is due to price support policies in agriculture, which distorted the allocation of resources in favor of agriculture, thereby delayed the process of the structural transformation. We develop a dynamic general equilibrium model with agricultural and non-agricultural sectors. The production of the non-agricultural good can take place in the market or the household sector. We show the extent to which these policies can account quantitatively for Turkey's relative stagnation
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number
703.
Length: Date of creation: 03 Dec 2006 Date of revision: Handle: RePEc:red:sed006:703
Contact details of provider: Postal: Society for Economic Dynamics Anne Stubing CV Starr Center for Applied Economics 269 Mercer Street, Room 303 New York University New York, NY 10003 Fax: 1-860-486-4463 Email: Web page: http://www.EconomicDynamics.org/society.htm More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Christian Zimmermann).
Find related papers by JEL classification: O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
This paper has been announced in the following NEP Reports:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)