In this study, Efficiency Wage Theory, a Keynesian approach has been examined aiming to a light to discussions of determine the appropriate wage policies for Turkey. According to the efficiency wage theory, the physical health and productivity of workers are positively related to the wages paid to workers. On this basis, firms ensure that workers are healthier and more productive by paying higher wages. The efficiency wage theory is partially explanatory in the Turkish manufacturing industry for the 1963-1998 period. That is to say, wages cause productivity in a Granger sense. What this really means is that wages allow us to foresee productivity in some sectors. The results support this theory in some sectors and do not support in others.
Key words: Efficiency Wage Theory, Granger Causality Test. JEL Classification: E24 Article Language: EnglishTurkish
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