Output, the Real Exchange Rate, and the Crises in Turkey

Ardic, Oya Pinar (2006): Output, the Real Exchange Rate, and the Crises in Turkey. Published in: Topics in Middle Eastern and North African Economies, MEEA Online Journal , Vol. 8, (2006)

Abstract

Since the 1980s, most emerging economies have experienced economic crises associated with large, prolonged current account deficits and real exchange rate misalignment. Eventually these governments ended up devaluing national currencies. Empirical evidence from developing countries suggests that devaluation, in most cases, have been contractionary due to demand-side and supply-side effects. This paper studies the Turkish experience since the 1980s, and based on the results of a VAR analysis, finds that devauations were indeed contractionary.

• Item Type: MPRA Paper
• Language: English
• Keywords: Turkey, real exchange rate, crisis, contractionary devaluations
• 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 > F3 - International Finance > F32 - Current Account Adjustment ; Short-Term Capital Movements; F - International Economics > F3 - International Finance > F31 - Foreign Exchange

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