An empirical model for the Turkish trade balance: new evidence from ARDL bounds testing analyses

Korap, Levent (2011): An empirical model for the Turkish trade balance: new evidence from ARDL bounds testing analyses. Published in: İstanbul University Department of Economics Econometrics and Statistics e-Journal , Vol. 14, (2011): pp. 38-61.

Abstract

In this paper, the determinants of the Turkish trade balance are tried to be analyzed in an empirical modelling approach. For this purpose, the contemporaneous ARDL-based bounds testing has been used to examine the existence of a long run co-integration relationship between the variables of our interest. The estimation results indicate that real exchange rate depreciations improves the trade balance in a strong and significant way, that domestic real income affects the trade balance negatively, and that trade balance is strongly improved due to an increase in foreign real income. No significant effect of crude oil prices can be observed on trade balance. The error correction modeling gives results in line with the long run findings of the co-integration analysis.

• Item Type: MPRA Paper
• Language: English
• Keywords: Trade Balance; ARDL Bounds Testing Approach; Turkish Economy
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; F - International Economics > F1 - Trade > F10 - General; F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F41 - Open Economy Macroeconomics

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