Effects of the real exchange rate on output and inflation: evidence from Turkey

Date
2003
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Source Title
The Developing Economies
Print ISSN
0012-1533
Electronic ISSN
1746-1049
Publisher
Wiley-Blackwell Publishing Ltd.
Volume
41
Issue
4
Pages
401 - 435
Language
English
Type
Article
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Abstract

This paper assesses the effects of real depreciation on the economic performance of Turkey by considering quarterly data from 1987:I to 2001:III. The empirical evidence suggests that, contrary to classical wisdom, the real depreciations are contractionary, even when external factors like world interest rates, international trade, and capital flows are controlled. Moreover, the results obtained from the analyses indicate that real exchange rate depreciations are inflationary.

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Keywords
Currency devaluation, Currency market, Inflation, Interest rate, Real exchange rate, Eurasia, Turkey
Citation
Published Version (Please cite this version)