The Effects of Real Exchange Rate Changes on Turkey's Foreign Trade Performance within the Framework of the Extended Marshall-Lerner Condition: Time Series Analysis with Multiple Structural Breaks

Ismet Gocer and Bekir Elmas

Journal of BRSA Banking and Financial Markets, 2013, vol. 7, issue 1, 137-157

Abstract: The purpose of this study is to analyze the relationship between real exchange rate and the balance of external trade of Turkey by using the intermediate goods, capital goods, consumption goods and total external trade data, within the extended Marshall-Lerner Condition framework, for 1989Q1-2012Q2 period by means of unit root test and cointegration methods with multiple structural breaks. In this study, the stationarity of series were tested with unit root test with multiple structural breaks of Carrion-i-Silvestre (2009). Cointegration relationship between series was tested via cointegration test with multiple structural breaks of Maki (2012). Cointegration coefficients were estimated by means of dynamic ordinary least square method. As a result of the analysis, extended Marshall-Lerner Condition is valid for all production groups in Turkey.

Keywords: Real Exchange Rate; External Trade Balance; Unit Root and Cointegration Test with Multiple Structural Breaks. (search for similar items in EconPapers)
JEL-codes: C23 C33 F31 F41 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:bdd:journl:v:7:y:2013:i:1:p:137-157

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