Verimlilik Artışı ve Kamu Harcamaları Arasındaki İlişkinin Balassa Samuelson Hipotezi Çerçevesinde Değerlendirilmesi
Evaluation of the Relationship Between Productivity Increase and Public Expenditures in the Framework of Balassa Samuelson Hypothesis

Summary/Abstract: Public investment expenditures are the economic policy instrument used by governments. The main objective of economic policy is to increase welfare. One of the important sources of welfare increase is productivity increase. Productivity is used as an explanatory criterion in explaining the differences in welfare levels between countries. For this reason, it is a problem that is sought for a solution today, as it was in the past. There is great interest in the subject due to the increase in the welfare of the country as a result of the appreciation of the real effective exchange rate. This relationship is referred to as the Balassa-Samuelson Hypothesis (BSH). The aim of the study is to analyze the Balassa-Samuelson Hypothesis for Turkey. Unlike other studies, the contribution of the study to the literature is the inclusion of public investment expenditures in the relevant model. The ARDL model was used for the period 1994-2020 in the analysis. In the long run, a 1% increase in productivity increases the real effective exchange rate by 1.77%. It is seen that public investment expenditures also have a positive sign in line with expectations.

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