Abstract:

With the disappearance of national borders, the world has rapidly turned into a global village and the countries have become well integrated in political, economic and cultural terms. The liberalization, in the economic and financial field, has accelerated international trade, transformed industrial production and exchange rates into an integral part of international trade. With financial liberalization, exchange rates become influenced by the country’s political, economic and security policies, while the fluctuations of these effects have begun to affect the country’s production, consumption and trade activities. Especially the countries that are related to the industry’s imports are more affected by these fluctuations in exchange rates. Finally, the country’s industrial production and exchange rates are two important factors that affect each other, while the economic developments that these two factors create significantly affect the economy’s confidence. This study aimed at determining whether there is a relationship between the total industrial production of Turkey, the economic confidence index and the real currency currency indicators. In the study, the real currency rate of the 2008:M1-2020:M3 period of Turkey, the total industrial production and the monthly data of the economic confidence index were analyzed econometrically. In the first stage of analysis, the extended Dickey Fuller (ADF) test was made to determine the stagnation degrees of the variables, and all of the variables became stagnant in the first variable. Later these variables were tested by Johansen and the conclusion was that there was at least one long-term matching relationship between the variables. Finally, the Granger causality test was applied to the variables and it was found that there was a one-way Granger causality relationship for three variables.

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