A Re-Examination of Kaldor’s Engine-of-Economic Growth Hypothesis for the Turkish Economy

Rahmi Yamak (), Havvanur Feyza Erdem () and Sinem Koçak ()
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Rahmi Yamak: Karadeniz Technical University
Havvanur Feyza Erdem: Karadeniz Technical University
Sinem Koçak: Karadeniz Technical University

Acta Universitatis Danubius. OEconomica, 2016, issue 12(4), 347-357

Abstract: The purpose of this study is to re-examine the validity of Kaldor’s engine-of-economic growth hypothesis (1966) for the Turkish economy in the context of time series analyses. The data used in this study are quarterly and cover the period of 1998:Q1-2015:Q4. The Autoregressive Distributed Lag (ARDL) bounds testing approach to co-integration was used to investigate the long-run dynamic relationship between industrial and non-industrial aggregate outputs. The results identify the long-run relationship between industrial and non-industrial economic performance. The Toda-Yamamoto approach to Granger causality test was employed to detect the causal links between industrial output and non-industrial aggregate output. Causality test results also support the causal implication of the engine-of-growth hypothesis for the case of Turkey.

Keywords: ARDL Bounds Testing Approach; Kaldor’s Engine-of-Economic Growth Hypothesis; Toda-Yamamoto Approach (search for similar items in EconPapers)
Date: 2016
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