Structural Macro econometric Model of Turkey; Impact of Structural Characteristics on Macroeconomic Indicators

In this paper, we develop a structural macro econometric model for Turkey, to assess the role of structural characteristics of an emerging economy on macroeconomic indicators. In this model, standard macroeconomic policy results are observed as the target levels and actual levels. Technically, we shall simulate our model over a rather long future period, and address in turn: i)The structural differences in Import dependence of Export, Factor productivity, Inflation & Growth, Exchange rate vs. Growth, Unemployment, CA, and consumption impact on actual and target levels. ii) The expected changes in structural elements: increase in factor productivity, faster depreciation of capital etc. iii) The policies the government could enact to soften or to profit from these changes. On the whole, we shall evidence a strong impact of structural characteristics in the process. Its role will generally prove a serious impediment to the standard macroeconomic policy results.