Potential Growth in Turkey: Sources and Trends

Share
Print

Title:

Potential Growth in Turkey: Sources and Trends

Number:

21/07

Author(s):

Orhun Sevinç, Ufuk Demiroğlu, Emre Çakır, E. Meltem Baştan

Language:

English

Date:

March 2021

Abstract:

This paper estimates potential growth in Turkey using a production function estimation approach. Our approach aims to measure the inputs of production in the most detailed fashion that is possible and empirically addresses concepts of sustainable potential growth for Turkey. While developing measures of the sources of potential growth, we provide a thorough discussion of the estimated trends in labor force participation, capital growth by asset type, and total factor productivity since the mid-2000s. Our results suggest that the key driver of potential growth has increasingly been capital accumulation. The declining trend in the positive TFP growth stands out as the key area of improvement for potential growth.

Keywords:

Potential growth, Labor force participation, Productivity, Capital accumulation

JEL Codes:

E1; J21; O4

Potential Growth in Turkey: Sources and Trends