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Did the Rising Importance of Services Decelerate Overall Productivity Improvement of Turkey during 2002-2007

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  • Murat Ungor

Abstract

When examined in isolation, the 2002-2007 period in Turkey stands out as a high growth period. However, the relative performance of Turkey in this period is weaker compared to China. The service sector in Turkey had the lowest labor productivity growth rate. Counterfactual experiments based on a three-sector model point out that the service sector represented a drag on aggregate productivity in Turkey. Using a newly constructed detailed sectoral database for China, I argue that if the service sector in Turkey had had the same annual productivity growth rates as observed in China, then the average annual growth rate of the aggregate labor productivity would have been 7.8% instead of 5.7% during 2002-2007.

Suggested Citation

  • Murat Ungor, 2013. "Did the Rising Importance of Services Decelerate Overall Productivity Improvement of Turkey during 2002-2007," Working Papers 1315, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  • Handle: RePEc:tcb:wpaper:1315
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    Keywords

    Sectoral productivity; services; China; Turkey;

    JEL classification:

    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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