Has Customs Union Agreement Had Turkey Converge To The European Union?

The convergence hypothesis proposed by Solow (1956), indicates that low-income countries will catch up high-income countries in terms of per capita income, growing faster than high-income countries in the long run. This study aims to investigate whether or not Turkey converges to European Union (EU) with the participation of Customs Union. In accordance with this purpose, using annual data 1923-2008 and the sample period divided into three sub-periods which are prior to participation of Customs Union, after participation of Customs Union and covering for both, convergence analysis was performed by using “Seemingly Unrelated Regression Augmented Dickey Fuller-SURADF” unit root test and “Cross-Section Augmented Dickey Fuller-CADF” unit root test. CADF unit root test proves that Turkey converges to EU for each three sub-periods