Liberalization and the terms of trade in Turkey: a causal analysis

There has been extensive trade liberalization in developing countries in recent decades. Several liberalization episodes have been completed in Turkey. In this paper we evaluate the relationship between trade liberalization in Turkey and the terms of trade. Has liberalization preceded changes in the terms of trade or vice versa. Using causality analysis we investigate several hypotheses and conclude that in this case trade liberalization follows a terms of trade change, a finding which is consistent with the trade shocks hypothesis.