A test for a functioning market economy: Seton'S eigenprices of Turkey

Date

2015

Authors

Demir, N.
Solakoglu, M. N.
Solakoglu, E. G.

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Abstract

We use Seton's eigenprices to see if some evidence can be found in support of the European Commission's official statement that the Turkish economy can be considered as a functioning market economy. Given an input–output flows matrix, there is a unique set of prices for outputs and production factors compatible with final demand, generating demand for factors. The findings based on Turkey's most recent I–O table and comparable I–O matrices for Romania and Poland (two EU members) in 2005 show that price distortions were on average five times larger in Turkey. Hence, based on price distortions alone, there was no solid evidence in support of the statement that Turkey had a functioning market economy.

Source Title

Economic Systems Research

Publisher

Routledge

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Published Version (Please cite this version)

Language

English