Estimating the surplus in the periphery: an application to Turkey

Somel C.

CAMBRIDGE JOURNAL OF ECONOMICS, vol.27, no.6, pp.919-933, 2003 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 27 Issue: 6
  • Publication Date: 2003
  • Doi Number: 10.1093/cje/27.6.919
  • Journal Name: CAMBRIDGE JOURNAL OF ECONOMICS
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.919-933
  • Keywords: economic surplus, dependency, development
  • Middle East Technical University Affiliated: No

Abstract

This note discusses how the economic surplus concept can be used to analyse the constraints the world system imposes on economic development. An estimation of the surplus for Turkey for 1980-96 utilises Kohler's unequal exchange analysis to measure the transfer of surplus abroad and the official minimum wage to calculate essential private consumption. The estimation yields the allocation of the surplus between nonessential consumption, investment and unrequited transfers abroad. The note assesses Lippit's argument that the main obstacle to development is the misuse of the surplus in the domestic economy and not transfers abroad.