Halicioglu, Ferda (2007): The Bilateral J-curve: Turkey versus her 13 Trading Partners.
Download (150kB) | Preview
This study empirically analyses bilateral J-curve dynamics of Turkey with her thirteen trading partners using quarterly time series data over the period 1985-2005. Previous studies on the J-curve of Turkey are based on only aggregate data and they reveal mixed results. Short and long-run impacts of the depreciation of Turkish lira on the trade balance between Turkey and her thirteen trading partners are estimated from the bound testing approach and error correction modeling. The empirical results indicate that whilst there is no J-curve effect in the short-run, but in the long-run, the real depreciation of the Turkish lira has positive impact on Turkey’s trade balance in couple of countries. The stability of the long-run trade balance equations is also checked through CUSUM and CUSUMSQ stability tests.
|Item Type:||MPRA Paper|
|Institution:||Department of Economics, Yeditepe University|
|Original Title:||The Bilateral J-curve: Turkey versus her 13 Trading Partners|
|Keywords:||J-curve; co-integration; stability tests; Turkey|
|Subjects:||C - Mathematical and Quantitative Methods > C2 - Single Equation Models; Single Variables > C22 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
F - International Economics > F3 - International Finance > F31 - Foreign Exchange
F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade
|Depositing User:||Ferda HALICIOGLU|
|Date Deposited:||15. Jun 2007|
|Last Modified:||12. Feb 2013 15:29|
Akbostanci, E. (2004) Dynamics of the trade balance: The Turkish J-curve, Emerging Markets Finance and Trade, 40, 57-73. Akyurek, C. (2006) The Turkish crisis of 2001: A classic? Emerging Markets Finance and Trade, 42, 5-32. Arndt, H. W. and Dorrance, G. (1987) The J-curve, The Australian Economic Review, 11, 9-19. Arora, S., Bhamani-Oskooee, M., and Goswami, G. (2003) Bilateral J-curve between India and her trading partners, Applied Economics, 35, 1037-1041. Bahmani-Oskooee, M. (1985) Devaluation and the J-curve: some evidence from LDCs, The Review of Economics and Statistics, 67, 500-504. Bahmani-Oskooee, M. and Malixi, M. (1992) More evidence on the J-curve from LDCs, Journal of Policy Modelling, 14, 641-653. Bahmani-Oskooee, M. and Alse, J. (1994) Short-run versus long-run effects of devaluation: error correction modelling and cointegration, Eastern Economic Journal, 20, 453-464. Bahmani-Oskooee, M. and Brooks, T. J. (1999) Bilateral J-curve between US and her trading partners, Weltwirtschaftliches Archiv, 135, 156-165. Bahmani-Oskooee, M. and Goswami, G. G. (2003) A disaggregated approach to test the j-curve phenomenon: Japan versus her major trading partners, International Journal of Economics and Finance, 27, 102-113. Bahmani-Oskooee, M. and Ratha, M. (2004a) The J-curve: A literature review, Applied Economics, 36, 1377-1398. Bahmani-Oskooee, M. and Ratha, M. (2004b) The J-curve dynamics of U.S. bilateral trade, Journal of Economics and Finance, 28, 32-38. Bahmani-Oskooee, M., Goswami, G. G., and Talukdar, B. K. (2005) The bilateral J-curve: Australia versus her 23 trading partners, Australian Economic Papers, 44, 110-120. Bahmani-Oskooee, M., Economidou, C., and Goswami, G. G. (2006a) Bilateral J-curve between the UK vis-à-vis her major trading partners, Applied Economics, 38, 879-888. Bahmani-Oskooee, M. and Wang, Y. (2006b) The J-curve: China versus her trading partners, Bulletin of Economic Research, 58, 323-343. Brada, J. C., Kutan, A. M. and Zhou, S. (1997) The exchange rate and the balance of trade: the Turkish experience, Journal of Development Studies, 33, 675-692. Brown, R. L., Durbin, J. and Evans, J. M. (1975) Techniques for testing the constancy of regression relations over time, Journal of the Royal Statistical Society, 37, 149-163. Ertugrul, A., and Selcuk, F. (2001) A brief account of the Turkish economy, 1980-2000, Emerging Markets Finance and Trade, 37, 6-30. Engle, R. F. and Granger, C. W. J. (1987) Cointegration and error correction representation: estimation and testing, Econometrica, 55, 251-276. Hacker, R. S., and Hatemi, A. J. (2004) The effect of exchange rate changes on trade balances in the short and long run, Economics of Transition, 12, 777-799. Kale, P. (2001 Turkey’s trade balance in the short and the long run: an error correction modelling and cointegration, The International Trade Journal, 15, 27-56. Kremers, J. J. M., Ericson, N. R. and Dolado, J. J. (1992) The power of cointegration tests, Oxford Bulletin of Economics and Statistics, 54, 325-348. Krueger, A. D. (1983) Exchange rate determination, Cambridge University Press, Cambridge Magee, S. P. (1973) Currency contracts, pass through, and devaluation, Brookings Papers of Economic Activity, 1, 303-325. Moura, G. and Da Silva, S. (2005). Is there a Brazilian J-curve? Economic Bulletin, 6, 1-17. Narayan, P. K. (2004) New Zealand’s trade balance: evidence from the J-curve and Granger causality, Applied Economics Letters, 11, 351-354. Narayan, P. K., and Narayan, S. (2004) The J-curve: evidence from Fiji. International Journal of Applied Economics, 18, 369-380. Narayan, P.K. (2005). The saving and investment nexus for China: evidence from cointegration tests, Applied Economics, 37, 1979-1990. Onafowora, O. (2003) Exchange rate and the trade balance in East Asia: is there a J-curve? Economics Bulletin, 5, 1-13. Pesaran, M. H.., Shin, Y. and Smith, R. J. (2001) Bounds testing approaches to the analysis of level relationships, Journal of Applied Econometrics, 16, 289-326. Rose, A. K. (1990) Exchange rates and the trade balance: some evidence from developing countries, Economics Letters, 34, 271-275. Rose, A. K. and Yellen, J. L. (1989) Is there a J-curve? Journal of Monetary Economics, 24, 53-58.