Validity of Balanced Growth: Evidence from Turkey


BILIG, no.76, pp.205-226, 2016 (Journal Indexed in SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: Issue: 76
  • Publication Date: 2016
  • Title of Journal : BILIG
  • Page Numbers: pp.205-226


One of the central hypotheses of neoclassical growth literature is the balanced growth hypothesis, which predicts that output, consumption and investment grow at the same rate. Empirically, this implies that consumption and investment must be cointegrated with output. This paper investigates these implications with respect to Turkey, using unit root tests and co-integration techniques. We find that the long-term growth path of Turkish economy is consistent with the balanced-growth hypothesis without a significant structural break.