FEAS RESEARCH E-BULLETIN FEAS E-BULLETIN DECEMBER 2016 - Page 17

Author: Yılmaz, Gökhan Title: Essays on the Middle Income Trap with Special Emphasis on Turkey Supervisor: Assoc. Prof. Dr. Dürdane Şirin Saraçoğlu Department: Economics Date: May 2016 Abstract: In the thesis, we present two different endogenous growth models for a middle income trap economy. In order to present two growth models, first we investigate the experiences of the middle income trap and nontrap countries. Our analysis shows importance of “human capital” and “structural change” rooted factors to overcome the middle income trap. Second, we analyze the relative importance of these factors by using the shift share analysis. Our findings demonstrate that average labor productivity growth rates differ significantly in the trap and nontrap economies and this difference mainly comes from the “within sector” productivity gains. Third, we present an endogenous growth model with quadratic technology function for a middle income trap economy (the first model). The quantitative assessment of the model for Turkey shows that increasing the years of schooling, educational quality, share of researchers in overall educated population, and the technology transfer may enable Turkey to escape the trap. Last, we present an endogenous growth model with human capital and biased technological changes for a middle income trap economy (the second model). The model implies that the most effective two ways to get a higher growth rate and hence to get satisfactory convergence experience are to have improvements in human capital quantity and quality. Both of the models in the thesis show the importance of a high quality education system with special emphasis on the science, technology, engineering and mathematics training to overcome the trap. 14