The Impact of Oil Prices in Turkey on Macroeconomics

Erkan Aktaş, Çiğdem Özenç and Feyza Arica ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study explores the impact of fluctuations in oil prices on Turkey's economy. The data used in this study covers the years from 1991 to 2008. Macro-economic variables used in this study are GNP, inflation, unemployment and the ratio of exports to imports. VAR model is used in estimating the macro-economic impact of oil prices. Based on the results of the analysis conducted, a meaningful relationship of oil prices with inflation, unemployment and the ratio of exports to imports is estimated. However, it is observed that a rise in oil prices do not have any substantial impact on macro-economic variables. While an inverse relationship of oil prices with the ratio of exports to imports and unemployment is estimated, a direct relationship between oil prices and inflation emerged. The results of impulse-response analysis shows that the responses of macro-economic variables to oil price shocks become stable only after one year.

Keywords: Oil prices; VAR; Macroeconomics; Turkey (search for similar items in EconPapers)
JEL-codes: C32 E6 (search for similar items in EconPapers)
Date: 2010-02-18, Revised 2010-06-15
New Economics Papers: this item is included in nep-ara, nep-cwa, nep-ene and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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