The middle income trap: an empirical evidence on the Turkish economy

Abstract

The concept of middle income trap is a frequently discussed issue in recent years. In this study, time series analysis was conducted using annual data for the period 1971-2015 in Turkey. This study, GDP per capita, manufacturing industry, domestic savings and schooling rate in higher education were selected as variables in the study considering the frequency of use in the literature. Findings show the existence of a long-term relationship between the variables we use. It is also determined that manufacturing industry and gross domestic savings are the cause of GDP. Policies for manufacturing industry should be developed, and domestic savings rate should be increased not to fall into the middle income trap of Turkey's.