Elasticities of Turkish Exports and Imports
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.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- 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.
- Ayla Ogus & Niloufer Sohrabji, 2008. "Analyzing the Present Sustainability of Turkey’s Current Account Position," Working Papers 0803, Izmir University of Economics.
- Alper, C. Emre & Saglam, Ismail, 1999. "The Equilibrium Real Exchange Rate: Evidence from Turkey," MPRA Paper 1924, University Library of Munich, Germany.
When requesting a correction, please mention this item's handle: RePEc:izm:wpaper:0906. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ayla Ogus Binatli)
If references are entirely missing, you can add them using this form.