The inconsistent response of Turkish export demand to real exchange rate shocks

Date
2015
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Source Title
Global Journal of Business Research
Print ISSN
1931-0277
Electronic ISSN
2157-0191
Publisher
The Institute for Business and Finance Research
Volume
9
Issue
1
Pages
49 - 56
Language
English
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Abstract

In this study, we examine the responsiveness of exports to the real exchange rate shocks for different countries. Employing a Vector Autoregressive (VAR) methodology, the effects of different real exchange rate shocks on the Turkish export demand is examined by using quarterly data from the Turkey’s 15 major trade partners. The study finds that the depreciation of the aggregate real exchange rate affected the Turkish export demand positively and significantly for three quarters. After accounting for the effect of the aggregate real exchange rate, this study empirically shows that the responses of Turkish exports to individual bilateral real exchange rate shocks are not uniform across countries.

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