A SKETCH OF DEVALUATION THEORIES

Date

1977

Author

Olgun, Hasan

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A comparison of the matrices of technology for the Turkish economy shows that the input coefficients underwent considerable changes over the decade 1963-1973 and these changes.were not, by any standard, gradual. If intersectoral flows are examined in detail, many of the changes in technical coefficients can be interpreted as substitution of a commodity with another, examples of which are presented in the text. However, from a macroeconomic viewpoint, structural change must be evaluated not by enumerating individual changes in coefficients, but by considering (i) linkage effects and sectoral categorization, (ii) changes in production techniques, and (iii) the pattern of intermediate use. Both direct and total (backward) linkage indices for the entire economy show a moderate but steady growth in the period 1963 - 1973, implying that the sectoral interdependence is increasing. If "key" sectors are identified as those with high total linkage effects, then key sectors in the Turkish economy during the period mentioned are metal products, metallurgy, textiles + apparels, food, wood products and rubber + plastics. On the other hand, drastic changes in techniques of production do not seem to have taken place in the same period, if conventional criteria for changes in technique are adhered to. Nevertheless, it should be recalled that the distinctive properties of these criteria are rather weak. Agriculture, mining, paper + printing, chemicals, non-metallic products, transportation equipment and energy are the sectors which exhibit fairly rapid changes in production techniques in comparison to other activities. Furthermore, a scrutiny of intermediate use patterns over time reveals that the same final demand vector of 1973 is being produced with increased use of inputs of rubber + plastics, chemicals, petroleum derivatives, metallurgy, vehicles and energy, while inputs coming from agriculture, mining and textiles + apparels are being decreased. If rapid structural changes are being observed in the Turkish economy, as it seems to be the case, developing methods in order to forecast technological structures becomes a necessity. Here an attempt is made to obtain a matrix of "new" technology following Carter's embodied technological change approach. Partly due to the nature of this approach, structural changes in the future are predicted to take place more smoothly than in the past. Key sectors of the new technology are likely to be the same as those of 1973 structure, with some differences in ranking. "New" production techniques are found not to be very similar to those of a relatively developed economy (Italy, 1971). Hence, from an operational viewpoint, the structural change of a less developed economy cannot be modeled as a gradual transformation towards the structure of a developed one. As the level of aggregation proceeds further, the differences in the structure of production will obviously be blurred and technological coefficients will start to look similar internationally.

URI

https://hdl.handle.net/11511/110638

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Department of Economics, Article