The Relationship among Nominal Exchange Rate Import and Export in Turkey for the Period 1988:1 to 2015: 3

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Çatalbaş N.

International Research Journal of Applied Finance, vol.7, no.4, pp.11-25, 2016 (Peer-Reviewed Journal)


This study analyzes the relationship between nominal exchange rate, and import and export in Turkey for the period 1998:1 to 2015:3 using VAR model on three-month data. The data were analyzed by means of Granger causality variance decomposition and impulse-response analysis. According to the Granger causality test, there is a one-direction relationship of causality from import to export. There is no causal relationship between nominal exchange  rate and export, and import. Variance decompositions and impulse response analysis also confirm the results of Granger analysis of causality. These results show that the exchange rate does not have a significant effect on the export, import, and trade balance, and the measures for import restrictions will adversely affect exports.