Role of macroeconomic developments on total factor productivity in the Turkish economy (1972-2003)

Abstract

In this thesis, by using regression analysis method, I investigated the role of macroeconomic variables on Total Factor Productivity (TFP) growth in the Turkish economy over the period of 1972-2003. Empirical findings of this study are that instabilities in foreign exchange and real exchange rate appreciation has negative role on TFP growth, on the other hand, growth of export of goods, imports of intermediate goods as a share of GDP, growth of public real infrastructure investments and current account deficit as a share of GDP have positive impacts on TFP growth. Inflation rates, interest rates, public sector borrowing requirement and foreign direct investment inflow insignificant variables to determine TFP growth in the Turkish economy. Also, in this thesis, the Turkish economy is investigated in the context of import-substituting industrialization period, export-led growth period and post-financial liberalization period.