Macroeconomic impacts of global food price shocks on the economy of Turkey

Ayhan Kapusuzoglu, Xi Liang and Nildag Basak Ceylan
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Ayhan Kapusuzoglu: Department of Banking and Finance, Faculty of Business, Ankara Yildirim Beyazit University, Turkey
Xi Liang: Department of Accounting and Finance, Business School, The University of Edinburgh, United Kingdom
Nildag Basak Ceylan: Department of Banking and Finance, Faculty of Business, Ankara Yildirim Beyazit University, Turkey

Agricultural Economics, 2018, vol. 64, issue 11, 517-525

Abstract: The purpose of this study is to examine the impact of food prices on the macroeconomic variables of Turkey. The effects are investigated using monthly data for the period January 1980-January 2016. A structural vector autoregressive (SVAR) model is employed for the analysis. Impulse response functions are obtained to assess the impact of food price shocks on the macroeconomic variables of Turkey. To this end, SVAR model is employed as suggested by Cushman and Zha (1997). The impulse responses gathered suggest that the food price causes Turkish Lira (TRY) to appreciate and inflation to increase contemporaneously. This study provides an important contribution to the literature in terms of determining the factors and presenting the measures to be taken against these factors for Turkey which is a developing country and sensitive to macroeconomic factors.

Keywords: agricultural commodity; economic variables; global market; structural vector autoregressive model (SVAR) (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:caa:jnlage:v:64:y:2018:i:11:id:261-2017-agricecon

DOI: 10.17221/261/2017-AGRICECON

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