Conference Paper
Reconsidering the Nexus between Knowledge and Economic Growth in An Unstable Economy: The Case of Turkish Economy
No.
ERF30_144
Publisher
ERF
Date
March, 2024
This paper, inspired by the Turkish experience, investigates the role of macroeconomic instability and knowledge on total factor productivity over the 1960-2022 period, by using a production function approach. Within our simple model of total factor productivity we link short-run policy outcomes, with a proper measure of the quality of macroeconomic performance, to long-run productivity measures by considering political economy factors such as socio-political and institutional issues. In doing so, we attempt to measure the quality of macroeconomic performance with a composite macroeconomic stability indicator which acted as a moderating variable in our framework. This framework helps us to understand the dynamics behind the substantial volatility in productivity and hence output in Türkiye during the last six decades. The empirical results indicate that while knowledge accumulation in Türkiye is a critical driver of productivity and growth, the economy is also persistently and unfavorably affected by chronic macroeconomic instability fueled by the recurring unsound policies and weak institutions.
Authors
Fatma M. Utku-İsmihan
EU Expert, Ministry of Agriculture and Forestry,...
Authors
Mustafa Ismihan
Professor of Economics, Department of Economics, Eastern...