The Exchange Rate and the Trade Balances of Turkish Agriculture,Manufacturing and Mining |
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Authors: | Mehmet Yazici |
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Institution: | 1.Department of International Trade,?ankaya University,Balgat Ankara,Turkey |
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Abstract: | This paper investigates and compares the response to the exchange rate changes of trade balances of three Turkish sectors;
agriculture, manufacturing and mining. The impact on trade balance of exchange rate changes is examined using the trade balance
model employed in Bahmani-Oskooee 1985, Review of Economics and Statistics 67: 500]. Analysis is conducted based on the quarterly data from 1986: I to 1998: III. It is observed that in response to
domestic currency depreciation trade balance of each of all three sectors first improves, then deteriorates and then improves
again. Despite exhibiting similar pattern of reaction to the exchange rate change in the short run, long-run or overall response
of trade balance differs across the sectors; while trade balances of both manufacturing and mining improve in the long run,
agricultural trade balance worsens as a result of domestic-currency depreciation. |
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Keywords: | exchange rate J-curve polynomial distributed lag model sectors trade balance |
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