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The Bilateral J-curve: Turkey versus her 13 Trading Partners

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  • Halicioglu, Ferda

Abstract

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.

Suggested Citation

  • Halicioglu, Ferda, 2007. "The Bilateral J-curve: Turkey versus her 13 Trading Partners," MPRA Paper 3564, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:3564
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    J-curve; co-integration; stability tests; Turkey;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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