Abstract:

This study has studied the long-term and short-term relationships between exports, imports and real currency in Turkey. The study used three-month data for the period 1990:1- 2019:3 and the data were obtained from the OECD database. First, the logarithm of the series was taken. The continuity test, along with the Extended Dickey-Fuller (ADF) and Philips-Perron unit root tests, as well as the Lee-Strazicich two structural broken LM unit root tests, determined that the series stands in the first difference. Secondly, the long-term relationship between the series was studied by the Johansen equalization test, and a single equalized relationship between the series was identified. The long-term relationship between the vector error correction model (VECM) and the series has been confirmed, and the short-term deviations in the series have been found to balance in the long-term. The short-term causal relationship between the series was studied by the Granger causal test. According to the Granger causality test results, there is a double causality relationship between the real currency rate and the export at the 1% significance level, a one-way causality relationship from import to export and from import to real currency rate.

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