Agricultural Productivity and Growth

This paper investigates the growth experience of one country in detail in order to enhance our understanding of important factors that a¤ect economic growth. Using a two sector model we identify the low productivity growth in the agricultural sector as the main reason for the divergence of income per capita between Turkey and its peer countries. An extended model that incorporates distortions in the use of intermediate goods in producing the agricultural output indicates that policies that have di¤erent e¤ects across sectors and across time may be important in explaining the growth experience of countries. We would like to thank the participants at the 2008 Economic Research Forum Conference organized by TUSIAD and Koç University, University of Hawaii, Society of Economic Dynamics annual meetings (2009), Federal Reserve Bank of New York, New York University, University of Tokyo, and Arizona State University.