Simultaneity between export and import flows and the Marshall–Lerner condition: the Turkish case (1998–2013)

Durmus Ozdemir () and Mustafa Gundogdu ()
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Durmus Ozdemir: Department of Economics, Yasar University
Mustafa Gundogdu: Department of Economics, Istanbul Bilgi University

No 2015/01, Discussion Papers from Yasar University, Department of Economics

Abstract: This paper examines the Marshall–Lerner condition under the simultaneity of exports and import flows in the Turkish economy. Due to the high interdependence between ratios of export and import flows to GDP, the traditional version of the Marshall–Lerner condition is not sustained. In the case of Turkey, the long-term estimations of the price elasticities of exports and imports, and the respective cross elasticities, lead us to conclude that currency devaluation would, in the long run, improve the balance of trade.

Keywords: Marshall–Lerner condition; price elasticity; Turkey; export and import flow simultaneity. (search for similar items in EconPapers)
JEL-codes: F11 F14 F44 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2015-08
New Economics Papers: this item is included in nep-ara, nep-cwa and nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:yas:dpaper:2015/01

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