Guncavdi, Oner and Ulengin, Burc (2008): Aggregate Imports and Expenditure Components in Turkey: Theoretical and Empirical Assessment.
Download (271kB) | Preview
After the economic turmoil in 2001, the Turkish economy quickly recovered, and exhibited distinguished economic performance in successive years without any interruption. This success can be considered as a product of favourable international economic conditions, sound macroeconomic reforms, the beginning of the accession talks with the EU and political stability with a single party government. All these favourable conditions have allowed the Turkish economy to not have experienced any financial restraints in financing this distinguished economic performance. While increased expenditure, particularly in consumption and investment, together with high foreign demand for Turkish production, appear to have played an important role in these growth rates, the economy has begun to experience a large surge in imports and current account deficits in response to an increase in domestic expenditure. The purpose of this paper is to examine the role of macroeconomic components of aggregate expenditure in determining import demand in Turkey. Along with the empirical assessment, the paper also suggests a theoretical model of import demand, which is built upon a utility maximization of a country subject to budget constraints. The empirical model derived as a dynamic form of linear expenditure system was estimated with quarterly data from the Turkish economy for the period of 1987-2006. The results show that consumption and expenditure are two important demand components in determining imports in the long run whereas only the growth rates of consumption and investment are dominant factors in the short run. Public expenditure appeared to have no significant impact on import demand in Turkey.
|Item Type:||MPRA Paper|
|Original Title:||Aggregate Imports and Expenditure Components in Turkey: Theoretical and Empirical Assessment|
|Keywords:||Aggregate Imports, Linear Expenditure System, Turkey, Error-Correction Model|
|Subjects:||O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O11 - Macroeconomic Analyses of Economic Development
O - Economic Development, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy; Factor Movement Policy; Foreign Exchange Policy
F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade
F - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies
|Depositing User:||Oner Guncavdi|
|Date Deposited:||21. Jul 2008 06:22|
|Last Modified:||13. Feb 2013 04:58|
Abbott A.J. and H.R. Seddighi (1996), “Aggregate Imports and Expenditure Components in the UK: An Empirical Analysis”, Applied Economics 28: 1119-1125.
Alias, M.H. and T.T. Cheong (2000), “Aggregate Expenditure Components in Malaysia”, ASEAN Economic Bulletin 17 (3): 257-269.
Arize, A. and G. Ndubizu (1992), “Cointegration, Error-correction Representation and Import Demand Function with Implications for International Finance and Accounting”, Review of Quantitative Finance and Accounting, December: 359-376.
Armington, P.S. (1969), “A Theory of Demand for Products Distinguished by Place of Production”, IMF Staff Papers 16: 159-176.
Asseery, A. and D.A. Peel (1991), “Estimates of a Traditional Aggregate Import Demand Model for Five Countries”, Economics Letters, April: 435-439.
Bahmani-Oskooee, M. (1998), “Cointegration Approach to Estimating the Long-Run Trade Elasticies in LDCs”, International Economic Journal 12 (3): 89-96.
Boylan, T.A., M.P. Cuddy, and I. O’Muircheataigh (1980), “The Functional Form of the Aggregate Import Demand Equations”, Journal of International Economics, November: 561-566.
Charemza, W.W. and D.F. Deadman (1992), New Directions in Econometric Practice, (Cambridge: Edward Edgar).
Deaton, A. and J. Muellbauer (1980), Economics and Consumer Behaviour, (Cambridge: Cambridge University Press).
Frimpong, J.M. and E.F.Oteng-Abayie (2006), “Aggregate Import Demand and Expenditure Components in Ghana: An Econometric Analysis”, MPRA Paper No. 599, (online at http://mpra.ub.uni-muenchen.de/599/.
Giovannetti, G. (1989), “Aggregate Imports and Expenditure Components in Italy: An Econometric Analysis”, Applied Economics 21: 957-971.
Granger, C. and P. Newbold (1974), “Spurious Regression in Econometrics”, Journal of Econometrics 35: 143-159.
Günçavdı, Ö. and B. Ülengin (2006), “On the Determinants of the Monthly Demand for Imports in Turkey: A VECM Approach”, Yapı Kredi Economic Review, Volume: 17, Number: 2, pp. 3-15.
Günçavdı, Ö., S. Küçükçifçi (2006), “Türkiye Ekonomisinde Büyümenin Kaynakları ve İstihdam Etkileri”, Bilin Neyaptı (ed.), Ekonominin Dinamikleri ve İstihdam – Kaynaklar ve Etkiler, Ankara: Türkiye Ekonomi Kurumu.
Günçavdı, Ö., S. Küçükçifçi and M. Üngör (2005), “Cari Açık ve Türkiye Ekonomisinin Artan Döviz İhtiyacı”, Unpublished Manuscript, Istanbul Technical University, Istanbul.
Günçavdı, Ö., S. Küçükçifçi and A. McKay (2003), “Adjustment, Stabilisation and the Analysis of the Employment Structure in Turkey: An Input-Output Approach”, Economics of Planning 36: 315-331.