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Impact Of Oil And Natural Gas Prices On The Turkish Foreign Trade Balance: Unit Root And Cointegration Tests With Structural Breaks

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  • Yilmaz BAYAR

    (Usak University)

  • Huseyin KARAMELIKLI

    (Karabuk University, Turkey)

Abstract

Energy is one of the main inputs in the industrial production process. There have been remarkable increases in global production with the industrial revolution and globalization. The raising energy demand as a result of the increases in global production has been predominantly met by nonrenewable resources such as oil, natural gas and coal. Consequently we have experienced significant increases in energy prices especially as of oil shocks in 1970s. This study investigates the role of energy in the chronic foreign trade deficits of Turkey by using Hatemi-J (2008) cointegration test and Toda-Yamamoto (1995) causality test during the period 1997:01-2015:03. We found that there was long run relationship among the foreign trade deficit, oil and natural gas prices and real effective exchange rate and there was unidirectional causality from oil and natural gas prices to the foreign trade balance.

Suggested Citation

  • Yilmaz BAYAR & Huseyin KARAMELIKLI, 2015. "Impact Of Oil And Natural Gas Prices On The Turkish Foreign Trade Balance: Unit Root And Cointegration Tests With Structural Breaks," Romanian Economic Business Review, Romanian-American University, vol. 10(3), pages 91-104, September.
  • Handle: RePEc:rau:journl:v:10:y:2015:i:3:p:91-104
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    References listed on IDEAS

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    Cited by:

    1. Liurong Pan & Asad Amin & Nian Zhu & Abbas Ali Chandio & Eric Yaw Naminse & Aadil Hameed Shah, 2022. "Exploring the Asymmetrical Influence of Economic Growth, Oil Price, Consumer Price Index and Industrial Production on the Trade Deficit in China," Sustainability, MDPI, vol. 14(23), pages 1-22, November.
    2. Nazife Özge BEŞER, 2019. "The effect of oil prices on foreign trade deficit in the economics of Bulgaria," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(620), A), pages 159-170, Autumn.

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