The Effect of Distribution on Accumulation, Capacity Utilization and Employment: Testing the Wage-Led Hypothesis for Turkey

This paper analyzes the impact of distribution on accumulation, capacity utilization and employment for Turkey by estimating a post-Keynesian open economy model in a structural vector autoregression form. The need for empirical analysis of the relationship between distribution and growth is particularly pronounced in the case of developing countries, where the pro-capital income policies of structural adjustment programs implemented in the last two decades is still far from fulfilling their promises in many cases. The aim of the paper is, to evaluate whether accumulation and employment are wage-led or profit-led. The results point out that accumulation, growth and employment are wage-led in Turkey.