Abstract:

In this study, the effects of the economic crisis on international trade and competitive power in Turkey are investigated for 1990:M01-2018:M06 period. Stationarity of the series are examined by ADF and PP unit root tests and the series are found to be I 1 . Cointegration relationships are tested by Johansen test, and the series are found to be cointegrated. Long and short-term analysis are performed by VECM method and it is seen that per capita GDP growth of the world does not affect the exports of Turkey in the short term and increase in the long term, while the increase in real effective exchange rate does not affect Turkey’s exports in the short term and reduces it in the long term. It is also seen that increases in per capita national income and real effective exchange rate in Turkey improve imports in both short and long term, while the long-term impacts are greater. It is determined for Turkey that 1994 crisis decreased both exports and imports in the short term but did not affect them in the long term, while foreign trade is not affected in the short term and is increased in the long term in the 2001 crisis. In 2008 crisis, import declines in the short term and export inclines in the long term. Error correction mechanism of the models operates. Causality relationships are investigated by Granger test and it is determined that two-way causality between per capita income of the world and Turkey's export, between per capita national income of Turkey and export of Turkey, between export and import of Turkey exist, while there is one-way causality relationship from real effective exchange rate to imports and from per capita national income of Turkey to real effective exchange rate. Furthermore, no causality relationship can be estimated between real effective exchange rate and exports

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