Abstract:

The concept of foreign trade is related with the flow of goods and capital out of the country. As well, it is in a close relation with economic growth which is just annual increase in country's real income. The importance and the causal relationship between these two variables change according to years and country's structure. Within this framework, this study aims to clarify the causality between foreign trade and economic growth for Turkish economy. Quarterly export, import and GDP data for 2002:01-2016:02 period is used for the analysis. Granger causality analysis result shows that one-sided causality from imports to economic growth exists for the period in Turkey. Besides, there is one-sided causality from imports to exports. These results prove "import-push growth" and "import-based export" hypotheses for Turkish economy.

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