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Dynamics of the trade balance - The Turkish J-curve
Date
2004-09-01
Author
Akbostancı Özkazanç, Elif
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The J-curve hypothesis suggests a specific pattern for the response of the trade balance to real exchange rate changes; a real depreciation initially worsens the trade balance, but through time the trade balance improves, and thus the response of the trade balance over time generates a tilted J-shape. This study investigates the existence of a J-curve in the Turkish data in the 1987-2000 period by using quarterly data. First, an error correction model is estimated to differentiate between the long-run equilibrium and short-run dynamics. Then the response of trade balance to real exchange rate shocks is investigated by using the generalized impulse response methodology Even though the suggested long-run pattern, which is the improvement of the trade balance in response to a real depreciation emerges, our results do not exactly support the J-curve hypothesis in the short run.
Subject Keywords
General Economics, Econometrics and Finance
,
Finance
URI
https://hdl.handle.net/11511/38660
Journal
EMERGING MARKETS FINANCE AND TRADE
DOI
https://doi.org/10.1080/1540496x.2004.11052584
Collections
Department of Economics, Article
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E. Akbostancı Özkazanç, “Dynamics of the trade balance - The Turkish J-curve,”
EMERGING MARKETS FINANCE AND TRADE
, pp. 57–73, 2004, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/38660.