Abstract:

The research of the relationship between trade openness and economic growth has been a topic of discussion for a long time. This study aims to analyze the trade openness-economic growth link for the Turkish economy in the period 1970-2018. ADF and PP unit root tests are used in the stationarity analysis of the variables. The results show that the variables are stationary when the first difference is taken. For cointegration analysis, Hatemi J-Irandoust hidden cointegration technique is preferred. According to the findings, there is an asymmetric cointegration between trade openness + component and economic growth + component. FMOLS estimator is used for long-term estimations in the study. Long-term forecasts indicate a positive relationship between trade openness + component and economic growth + component. According to the causality findings, there is a two-way causality between trade openness + component and economic growth + component. Empirical findings will be able to offer important policy recommendations for Turkey.

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