Trade Liberalisation and Economic Growth in Turkey: An Empirical Model of Endogenous Growth Analysis

Abstract

Using the framework of an endogenous growth model, this paper empirically analyses the role of trade policies on output growth in Turkey during the period of 1980-2000. The cointegration and error correction modeling approaches have been applied. The empirical results suggest that there exists a unique long-run relationship between gross domestic product and its major determinants of real capital stock, labour force, real net imports and secondary school enrolment ratio. The short-term dynamic behaviour of this relationship has been investigated by estimating an error correction model in which the error correction term has been found to be statistically significant and with correct sign.