Dynamics of macroeconomic adjustment in a globalized developing economy: Growth, accumulation and distribution, Turkey 1969-1999

Our purpose in this paper is to establish stylized facts of the Turkish mac roeconomic adjustments using data from 1969 to 1999 We adopt a traditional a priori definition of business cycles as cyclical co-movements of economic variables such as public, private and construction investments, trade bala nce, labour productivity, wages and fiscal accounts with the cyclical compo nent of real GDP. We also incorporate in our analysis an investigation of t he cyclical components of exchange rates, interest rates, price inflation, and the monetary aggregates. Our quantitative findings reveal a robust and significant positive relationship between public and private investments an d real GDP growth, suggesting the presence of "crowding in" effects of publ ic investment. Trend growth of manufacturing wages and average labour produ ctivity are loosely associated over the whole period, and the rapid gains i n productivity in the post-1980 reform era are not observed to be materiali zed as gains in remunerations of wage labour We also find a significant neg ative correlation of manufacturing wages with merchandise exports and the e xchange rate; and document further evidence of the strong negative correlat ion between variations in consumer prices and production.