THE RURAL ECONOMY UNDER STRUCTURAL ADJUSTMENT AND FINANCIAL LIBERALIZATION

The Macro-Integrated Agricultural-Sector modeling approach is introduced to analyze the economic effects of the post-1980 Turkish structural adjustment reform on the agricultural economy. The distinguishing feature of the model is its capability in addressing simultaneously the real and financial macro aggregates and the micro-sectoral detail of agriculture in a consistent fashion. The modeling analysis discloses that the Turkish mode of adjustment has typically relied on taxation of agricultural incomes, and suggests that an investment program based on reinvesting the rural surplus within the agricultural economy is a superior option.