| Summary: | This thesis evaluates the impact of the 1980 reform programme on the performance of the Turkish economy through applied econometric analysis. In particular, the effects of trade liberalisation on output, exports, imports and price determination are examined. In the theoretical literature, analyses of economic reform programmes have established that a reduced form relationship exists between trade liberalisation and economic performance and that this relationship is based on complex structural relationships. Our first broad contribution is to formalise and examine these arguments to provide a theoretical framework to help think about the complexity of these issues. The second contribution is to study, using data disaggregated by industry, the impact of economic reform in Turkey since the mid-1960'sThe empirical literature on policy reform on Turkey indicates policy change has a positive effect on economic performance. However, the literature has mainly concentrated on aggregate analysis and paid little attention to the links between policy reform and economic performance operating at the disaggregate, industrial level. An analysis undertaken with aggregate data is subject to two deficiencies: The first, economic deficiency, concerns the loss of important information that can be obtained from an investigation of interrelations between the sectors of economy since aggregate analysis disguises a lot of information. The second, statistical deficiency is closely related to the fact that there are complex interrelations among the sectors of economy, and that the structure of the economy changes over time. Results indicate that trade liberalisation has a positive impact on the performance of the Turkish economy. Importantly, the empirical evidence suggests the existing studies in the literature underestimate the impact of openness on output and the contribution of the international trade sector in this process, but they overestimate the contribution of the competition effect.
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