STRUCTURAL CHANGE AND GROWTH PROSPECTS IN THE TURKISH ECONOMY: A DEMAND-SIDE DECOMPOSITION ANALYSIS

Over the past four decades, Turkey has undertaken a wide range of reforms that aim at liberalisation foreign trade, relaxation tariff system, deregulation financial and investment regulations. Significant structural change experienced in Turkish economy pursues access to global market. This paper presents an empirical investigation growth prospects both manufacturing industry during whole period from 1995 2015 sub-periods 1995–2001, 2001–2008, 2008–2015 1995–2015. Since investigating dynamics economic supply-side been well documented literature, this work contributes literature on sources by providing more up-to-date analysis demand-side perspective case economy. We make use Chenery’s factor decomposition method decomposes output into domestic demand, import-substitution, export intermediate demand. Conclusions revealed total evolution was mainly responsive final demand 1995–2015 2002–2008 and, 2008–2015. However, nexus between tended weaken 2001 2008, but recovery took place again following periods. Moreover, stemmed expansion prevailing industry. To these ends, policies aimed increasing income, product diversity reducing poverty should be applied encourage deepening Furthermore, selective micro industrial technological upgrading diversification sustain create resilient external shocks