Abstract
This paper aims to investigate the effect of exchange-rate stability on real export volume in Turkey, using monthly data for the period February 2001 to January 2010. The Johansen multivariate cointegration method and the parsimonious error-correction model are applied to determine long-run and short-run relationships between real export volume and its determinants. In this study, the conditional variance of the GARCH (1, 1) model is taken as a proxy for exchange-rate stability, and generalized impulse-response functions and variance-decomposition analyses are applied to analyze the dynamic effects of variables on real export volume. The empirical findings suggest that exchangerate stability has a significant positive effect on real export volume, both in the short and the long run.
Highlights
ObjectivesSummary: This paper aims to investigate the effect of exchange-rate stability on real export volume in Turkey, using monthly data for the period February 2001 to January 2010
If the variables are stationary in their first differences, the long-run relationship among the variables is tested by using the cointegration method, developed by Soren Johansen (1988, 1991) and Johansen and Katarina Juselius (1990, 1992)
After obtaining the unit-root test results, we considered the KPSS test because of the shorter period and absence of a structural break, concluding that all variables are stationary in their first difference
Summary
Summary: This paper aims to investigate the effect of exchange-rate stability on real export volume in Turkey, using monthly data for the period February 2001 to January 2010. The aim of this study is to investigate the effect of exchange-rate volatility on Turkish exports in the period of a managed floating exchange-rate regime and to determine whether the policies based on this strategy and aiming at minimizing the fluctuations in exchange-rate are feasible in Turkish economy. This paper aims to investigate the effect of exchange-rate stability on real exports in the short and long-run by using the data for the period February 2001 to January 2010
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