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estimations are done using ARDL-BOUNDS library for EViews written by Mehmet Balcilar from Eastern Mediterranean University. We would like to thank him for sharing this library with us. We would like to thank two anonymous referees for their valuable comments and suggestions. Finally, we also would like to thank the co-editor Germán Coloma for his invaluable support.

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The purpose of this paper is to examine the sensitivity of the Turkish economy’s natural rate of growth to the actual rate of growth, covering the period 1980-2008. To determine the reason why the natural rate of growth is endogenous, the long-run and the causality relationships between real gross domestic product and each of the production factors (labour force and physical capital stock) are investigated with the bounds test. The natural rate of growth for the Turkish economy is found to be at 4.97 percent and the actual rate of growth in boom periods is approximately 35.6 percent; indicating endogeneity. However, according to the causality test results, the endogeneity of the natural rate of growth may be attributed to the total factor productivity rather than the labour force and physical capital stock. This result is important and the debate on this subject may lead to further studies