Business Cycle Synchronization of Turkey with Euro Area and the US : What Has Changed After 2001?
AbstractIn this paper, we make a detailed spectral analysis of the comovement of cycles of Turkish economy with cycles of euro area and the US. Relation between cycles may change with frequency, hence correlation of cycles at short, medium and long run may differ. Also, the correlation in different frequencies may change over time. Structural transformation observed in the Turkish economy after 2001 should also be taken into account in the analysis of business cycle synchronization. So, we use wavelet methodology that enables us to decompose cycles into different frequencies and also the method can deal with non-stationary data with structural change. We find that correlations of Turkish cycles with the cycles of euro area and the US increased after 2001. Moreover, although trade intensity of Turkish economy with euro area is much higher than with the US, in general, correlations of Turkish cycles with the US cycles are not lower than the euro cycles. Therefore, our results suggest that attention should not be limited to direct trade channel when analyzing effect of international developments on the Turkish economy.
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Bibliographic InfoPaper provided by Research and Monetary Policy Department, Central Bank of the Republic of Turkey in its series Working Papers with number 1215.
Date of creation: 2012
Date of revision:
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Business Cycle; Wavelet; Structural Change;
Find related papers by JEL classification:
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-29 (All new papers)
- NEP-ARA-2012-05-29 (MENA - Middle East & North Africa)
- NEP-MAC-2012-05-29 (Macroeconomics)
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- Mehmet Fatih Ekinci & Gazi Kabas & Enes Sunel, 2013.
"End-Point Bias in Trend-Cycle Decompositions: An Application to the Real Exchange Rates of Turkey,"
Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey,
Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 13(3), pages 61-71.
- M. Fatih Ekinci & Gazi Kabas & Enes Sunel, 2013. "End-Point Bias in Trend-Cycle Decompositions : An Application to the Real Exchange Rates of Turkey," Working Papers, Research and Monetary Policy Department, Central Bank of the Republic of Turkey 1316, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
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