Validity of J-Curve for Turkey and Its Main External Trade Partners: An Application of a Panel Data Approach

GÖZEN M. Ç., BOSTANCI F. C.

SOSYOEKONOMI, cilt.29, sa.50, ss.149-168, 2021 (ESCI) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 29 Sayı: 50
  • Basım Tarihi: 2021
  • Doi Numarası: 10.17233/sosyoekonomi.2021.04.08
  • Dergi Adı: SOSYOEKONOMI
  • Derginin Tarandığı İndeksler: Emerging Sources Citation Index (ESCI), TR DİZİN (ULAKBİM)
  • Sayfa Sayıları: ss.149-168
  • Anahtar Kelimeler: J-Curve, External Trade Deficits, Westerlund Panel Cointegration Analysis, DOLS Method, DCCE Model, EXCHANGE-RATES, TIME-SERIES, BALANCE, TESTS, COINTEGRATION, REGRESSION, DYNAMICS, CHINA
  • Kocaeli Üniversitesi Adresli: Evet

Özet

External trade cannot create the expected result for some countries due to their economic structures or policies. Economies could encounter severe foreign trade deficits and the risk of an economic crisis. Thus, researchers and policymakers analyse the dynamics of countries' external trade balances. Turkey's persistent current account deficit is one of the most significant macroeconomic problems. Turkey depreciated the Turkish Lira against foreign currencies to reduce its foreign trade deficit in the past. Using panel data analysis, the current study tests the J-curve for Turkey and its six main foreign trade partner countries - Russia, USA, Germany, UK, Italy, and China. Results do not support the validity of the J-curve hypothesis in the long run. Test results analysing the short-run indicate that the whole panel is statistically insignificant.