A reassessment of industrial growth in interwar Turkey in the light of the first-generation sectoral estimates

Abstract

This study presents the first sectorally-disaggregated estimates of the industrial output growth for interwar Turkey. At the aggregate level, the present estimates indicate that the existing official index overestimates the output growth. Secondly, the sectoral disaggregation implies that the industrial growth was balanced, as both textiles and food-processing branches, which made up the most of the value added, grew to a significant degree. I also find that local industries expanded against the background of the modest gains in per capita consumption of manufactured goods and incomes. Output growth was positively correlated with higher initial import penetration and higher nominal protection rates, implying that trade protectionism helped favourable relative prices to induce domestic expansion. On the other hand, the balanced growth documented by the recent sectoral disaggregation shows that both import-competing sectors such as textiles and the domestic-market oriented sectors such as food-processing significant expanded, implying that the import repression combined with increasing domestic demand to lead to output growth.

Publication
Historical Methods: A Journal of Quantitative and Interdisciplinary History (forthcoming)
Ulaş Karakoç
Ulaş Karakoç
Assistant Professor of Economics