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Elasticities of Turkish Exports and Imports

  • Ayla Ogus

    ()

    (Department of Economics, Izmir University of Economics)

  • Niloufer Sohrabji

    ()

    (Department of Economics, Simmons College)

The Turkish current account has been exploding in the last few years leading to concerns of a crisis. One of the primary factors identified in the rising deficits is the appreciating lira. In addition, income elasticity of exports and imports can also shed light on continuing trade deficits. In this paper we analyze exchange rate and income elasticity of Turkish imports and exports. We find a significant gap between domestic and foreign income elasticities (for exports and imports respectively) which points to a threat of growing trade deficits. In addition we also find that the exchange rate elasticity is negative for both Turkish exports and imports. This indicates that depreciation of the Turkish lira will have a negative effect on both imports and exports.

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File URL: http://eco.ieu.edu.tr/wp-content/wp0906.pdf
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Paper provided by Izmir University of Economics in its series Working Papers with number 0906.

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Length: 20 pages
Date of creation: Nov 2009
Date of revision:
Handle: RePEc:izm:wpaper:0906
Contact details of provider: Fax: (90) 232 279 2626
Web page: http://eco.ieu.edu.tr

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  1. Alper, C. Emre & Saglam, Ismail, 1999. "The Equilibrium Real Exchange Rate: Evidence from Turkey," MPRA Paper 1924, University Library of Munich, Germany.
  2. Bahmani-Oskooee, Mohsen & Niroomand, Farhang, 1998. "Long-run price elasticities and the Marshall-Lerner condition revisited," Economics Letters, Elsevier, vol. 61(1), pages 101-109, October.
  3. Thorbecke Willem, 2006. "How Would an Appreciation of the Renminbi Affect the U.S. Trade Deficit with China?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(3), pages 1-17, December.
  4. Ayla Ogus & Niloufer Sohrabji, 2008. "Analyzing the Present Sustainability of Turkey’s Current Account Position," Working Papers 0803, Izmir University of Economics.
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