IDEAS home Printed from https://ideas.repec.org/a/ibn/ijefaa/v8y2016i11p48.html
   My bibliography  Save this article

An Analysis of the Relationship between Crude Oil Prices, Current Account Deficit and Exchange Rates: Turkish Experiment

Author

Listed:
  • ?agatay Basarir
  • Mehmet Er?akar

Abstract

In this study, the effect of raw oil prices and exchange rates on current account deficit of the Turkish Economy has been examined by investigating the short and long run relationship between the current account deficit of the Turkish Economy, raw oil prices (Brent oil prices) and exchange rates (USD/TRY). The Monthly Data between December 1991 and January 2016 were used in the study. The relationships between the variables were tested with the VAR (Vector Auto Regressive) Model. None of the series was found stable after the unit root tests, but it was observed that all the variables became stable when their first differences were taken. Firstly, an unrestricted VAR model was built to determine the long term relationship between the variables. After the long term relationship was found between the variables, the VECM (Vector Error Correction) Model was estimated in order to determine the short term relationship. A mutual granger causality relationship is detected between crude oil prices and current account deficit variables. No causality relationship is found between the other variables.

Suggested Citation

  • ?agatay Basarir & Mehmet Er?akar, 2016. "An Analysis of the Relationship between Crude Oil Prices, Current Account Deficit and Exchange Rates: Turkish Experiment," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(11), pages 1-48, November.
    • Handle: RePEc:ibn:ijefaa:v:8:y:2016:i:11:p:48
    as

    Download full text from publisher

    File URL: https://ccsenet.org/journal/index.php/ijef/article/download/63954/34355
    Download Restriction: no
    File URL: https://ccsenet.org/journal/index.php/ijef/article/view/63954
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Özlale, Ümit & Pekkurnaz, Didem, 2010. "Oil prices and current account: A structural analysis for the Turkish economy," Energy Policy, Elsevier, vol. 38(8), pages 4489-4496, August.
    2. Brooks,Chris, 2008. "RATS Handbook to Accompany Introductory Econometrics for Finance," Cambridge Books, Cambridge University Press, number 9780521896955.
    3. Mr. Tobias N. Rasmussen & Agustin Roitman, 2011. "Oil Shocks in a Global Perspective: Are they Really That Bad?," IMF Working Papers 2011/194, International Monetary Fund.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zuriyati Ahmad & Nor Aziela Jafre & Wan Norsyakila Wan Kamarudin, 2023. "The Impact of Macroeconomic Factors on Current Account Deficit in ASEAN Countries," Business and Economic Research, Macrothink Institute, vol. 13(4), pages 216-226, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cagatay Basarir & Mehmet Emin Ercakar, 2016. "An Analysis of the Relationship between Crude Oil Prices, Current Account Deficit and Exchange Rates: Turkish Experiment," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 8(11), pages 48-59, November.
    2. Shahbaz, Muhammad & Sarwar, Suleman & Chen, Wei & Malik, Muhammad Nasir, 2017. "Dynamics of electricity consumption, oil price and economic growth: Global perspective," Energy Policy, Elsevier, vol. 108(C), pages 256-270.
    3. Priyanshi Gupta & Anurag Goyal, 2015. "Impact of oil price fluctuations on Indian economy," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 39(2), pages 141-161, June.
    4. Olcay Yucel Culha & Mustafa Utku Ozmen & Erdal Yilmaz, 2015. "Petrol Fiyatlarinin Ihracat Uzerindeki Etkisi," CBT Research Notes in Economics 1510, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    5. Hassan, Syeda Anam & Zaman, Khalid, 2012. "Effect of oil prices on trade balance: New insights into the cointegration relationship from Pakistan," Economic Modelling, Elsevier, vol. 29(6), pages 2125-2143.
    6. Jacks, David S. & Stuermer, Martin, 2020. "What drives commodity price booms and busts?," Energy Economics, Elsevier, vol. 85(C).
    7. Jan Babecky & Tomas Havranek, 2013. "Structural Reforms and Growth in Transition: A Meta-Analysis," William Davidson Institute Working Papers Series wp1057, William Davidson Institute at the University of Michigan.
    8. Vasileiou, Evangelos, 2018. "Is the turn of the month effect an “abnormal normality”? Controversial findings, new patterns and…hidden signs(?)," Research in International Business and Finance, Elsevier, vol. 44(C), pages 153-175.
    9. Fan, Chenguang & Bae, Seongho & Liu, Yu, 2024. "Can FinTech transform corporate liquidity? Evidence from China," Innovation and Green Development, Elsevier, vol. 3(2).
    10. Panarello, Demetrio, 2021. "Economic insecurity, conservatism, and the crisis of environmentalism: 30 years of evidence," Socio-Economic Planning Sciences, Elsevier, vol. 73(C).
    11. Prelorentzos, Arsenios-Georgios N. & Konstantakis, Konstantinos N. & Michaelides, Panayotis G. & Xidonas, Panos & Goutte, Stephane & Thomakos, Dimitrios D., 2024. "Introducing the GVAR-GARCH model: Evidence from financial markets," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).
    12. Nikitopoulos, Christina Sklibosios & Thomas, Alice Carole & Wang, Jianxin, 2023. "The economic impact of daily volatility persistence on energy markets," Journal of Commodity Markets, Elsevier, vol. 30(C).
    13. Baah Aye Kusi & Elikplimi Komla Agbloyor & Vera Ogeh Fiador & Kofi Achampong Osei, 2016. "Does Information Sharing Promote or Detract from Bank Returns: Evidence from Ghana," African Development Review, African Development Bank, vol. 28(3), pages 332-343, September.
    14. Luc Jacolin & Joseph Keneck Massil & Alphonse Noah, 2021. "Informal sector and mobile financial services in emerging and developing countries: Does financial innovation matter?," The World Economy, Wiley Blackwell, vol. 44(9), pages 2703-2737, September.
    15. Zied Ftiti & Aviral Tiwari & Ibrahim Fatnassi, 2014. "Oil price and macroeconomy in India – An evolutionary cospectral coherence approach," Working Papers 2014-68, Department of Research, Ipag Business School.
    16. Arlan Brucal & Michael Abrigo, 2017. "Can Cheap Oil Hurt Net Importers? Evidence from the Philippines," Working Papers id:12323, eSocialSciences.
    17. Yuksel BAYRAKTAR, & Taha EGRI, & Furkan YILDIZ, 2016. "A Causal Relationship Between Oil Prices Current Account Deficit, And Economic Growth: An Empirical Analysis From Fragile Five Countries," EcoForum, "Stefan cel Mare" University of Suceava, Romania, Faculty of Economics and Public Administration - Economy, Business Administration and Tourism Department., vol. 5(Special I), pages 1-3, august.
    18. Nataša Glišović & Miloš Milenković & Nebojša Bojović & Libor Švadlenka & Zoran Avramović, 2016. "A hybrid model for forecasting the volume of passenger flows on Serbian railways," Operational Research, Springer, vol. 16(2), pages 271-285, July.
    19. Ngoc Thien Anh Pham & Nicholas Sim, 2020. "Shipping cost and development of the landlocked developing countries: Panel evidence from the common correlated effects approach," The World Economy, Wiley Blackwell, vol. 43(4), pages 892-920, April.
    20. Ghaith N. Al-Eitan & Ayman M. Alkhazaleh & Ahmad S. Alkazali & Bassam Al-Own, 2021. "The Internal and External Determinants of the Performance of Jordanian Islamic Banks: A Panel Data Analysis," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 11(8), pages 644-657, August.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ibn:ijefaa:v:8:y:2016:i:11:p:48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Canadian Center of Science and Education (email available below). General contact details of provider: https://edirc.repec.org/data/cepflch.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.