Dynamics of the Trade Balance: The Turkish J-Curve

Akbostancı, Elif

doi:10.1080/1540496x.2004.11052584

Cited by 69 publications

(59 citation statements)

References 21 publications

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“…Kale (2001) points out that a real depreciation of the domestic currency helps to improve the trade balance with a lag of about one-year and the impacts of devaluations on the trade balance are positive in the long-run. In a recent study, Akbostanci (2004) also presents empirical evidence of the J-curve phenomenon in the long-run. As a passing note, one should point out that the last two studies are based on that of Johansen-Juselius (1990) multivariate cointegration procedure with relatively short data spans derived from the 1980s and 1990s.…”

Section: Introductionmentioning

confidence: 99%

The J-curve dynamics of Turkey: an application of ARDL model

Halıcıoğlu¹

2008

Applied Economics

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This article seeks an empirical evidence for the existence of the J-curve phenomenon both in the short-run and long-run for Turkey over the period 1980-2005. The bounds testing cointegration approach is employed to estimate the trade balance model. An augmented form of Granger causality analysis is implemented between trade balance, real effective exchange rates, foreign income and domestic income. The stability of the short-run as well as long-run coefficients in the trade balance model is tested too. The empirical results suggest that the J-curve phenomenon is supported only in the shortrun. Whilst causality tests reveal mix results, the parameter stability tests seem to be inconclusive.

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Section: Introductionmentioning

confidence: 99%

The J-curve dynamics of Turkey: an application of ARDL model

Halıcıoğlu¹

2008

Applied Economics

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“…According to research that is made by Kösekahyaoğlu and Kemeç (2015) for the period 1997-2013 it has resulted that the J curve hypothesis is not valid for Turkey. On the other hand, Akbostancı (2004) conducted a study with data which covered the period of 1987-2004, and according to the analysis, Turkey is in conformity with the behavior of S curve rather than the effect of J curve. As a result of the researches for the J-curve, no consensus was reached on it and opposing views emerged for J curve.…”

Section: Literaturementioning

confidence: 99%

Testing the Hypothesis of J Curve for Turkish Economy

Yılmaz¹,

Özaytürk²,

Oransay³

2017

CBR

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The purpose of this paper is to find the relationship between balance of foreign trade and real exchange rate in econometrics concept by using time series method. The authors used annual data of foreign trade deficit, real exchange rate, gross domestic product (GDP) of Turkey from 1989 to 2014, and analyzed the long-term relation of them by using ARDL bound testing method. By the result of test method; although there was a long-term relationship between balance of foreign trade, real exchange rate, GDP of Turkey and of the world, the coefficient of real exchange rate was insignificant in terms of statistical methods. Turkey and the world as well as being statistically significant coefficient of GDP, it was concluded that there was significant relationship with the economic aspects.

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“…After experiencing severe banking and currency crises in November 2000 and February 2001, Turkey abandoned the fixed exchange rate regime and let exchange rates freely float. After this critical decision, the interest in the exchange rate and trade balance relationship for Turkey has not diminished; on the contrary, it has increased by examining the effect of unpredictable currency depreciations on the export and more generally the trade balance performance (Akbostanci, 2004;Yazici, 2006;Halicioglu, 2008;Bahmani-Oskooee & Kutan, 2009). Studies seem to have been more interested in investigating whether the Marshall-Lerner (M-L) condition holds or J-curve adjustments process exists.…”

Section: Introductionmentioning

confidence: 99%

Currency Depreciation, Trade Balance and Intra-Industry Trade Interactions in Turkey’s OECD Trade

Demiral¹

2016

IJEF

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This study re-examines the determinants of Turkey's trade balance in its manufactures trade with 33 OECD-member countries for the short-run and the long-run. Unlike other studies, in the relationships we also control the moderating effects of the availability of import substitutes proxied by intra-industry trade. We analyze quarterly aggregated time-series data of the period spanning from 1998.QI to 2015.QIII, following the autoregressive distributed lag (ARDL) bounds testing approach to the cointegration and the error correction modeling. Estimation results reveal that real effective exchange rate, together with domestic and foreign incomes are still among the core determinants of Turkey's trade balance in the manufacturing sectors. There is no significant impact of domestic final oil prices that also include all the taxes on gasoline. The trade balance depends on domestic income negatively and the aggregated income of the OECD countries positively. The finding that real depreciation of Turkish lira against to those of Turkey's OECD trade partners improves trade balance in both the short-run and the long-run, indicates no evidence of J-curve adjustment process. Unsurprisingly, the intra-industry trade seems to be an important factor that moderates the elasticities of trade balance to its determinants, especially to real effective exchange rate and domestic income. Overall results underline the importance of import-substitution capability besides the export-oriented production to ease the longstanding large trade deficits for Turkey.

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Dynamics of the Trade Balance: The Turkish J-Curve

Cited by 69 publications

References 21 publications

The J-curve dynamics of Turkey: an application of ARDL model

The J-curve dynamics of Turkey: an application of ARDL model

Testing the Hypothesis of J Curve for Turkish Economy

Currency Depreciation, Trade Balance and Intra-Industry Trade Interactions in Turkey’s OECD Trade

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