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The Bilateral J-curve: Turkey versus her 13 Trading Partners

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  • Halicioglu, Ferda

Abstract

This study empirically analyses bilateral J-curve dynamics of Turkey with her thirteen trading partners using quarterly time series data over the period 1985-2005. Previous studies on the J-curve of Turkey are based on only aggregate data and they reveal mixed results. Short and long-run impacts of the depreciation of Turkish lira on the trade balance between Turkey and her thirteen trading partners are estimated from the bound testing approach and error correction modeling. The empirical results indicate that whilst there is no J-curve effect in the short-run, but in the long-run, the real depreciation of the Turkish lira has positive impact on Turkey’s trade balance in couple of countries. The stability of the long-run trade balance equations is also checked through CUSUM and CUSUMSQ stability tests.

Suggested Citation

  • Halicioglu, Ferda, 2007. "The Bilateral J-curve: Turkey versus her 13 Trading Partners," MPRA Paper 3564, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:3564
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    References listed on IDEAS

    as
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    Cited by:

    1. Bahmani-Oskooee, Mohsen & Durmaz, Nazif, 2016. "Asymmetric cointegration and the J-Curve: Evidence from commodity trade between Turkey and EU," MPRA Paper 83183, University Library of Munich, Germany, revised 14 May 2016.
    2. Aviral Kumar Tiwari, 2012. "An Error-Correction Analysis Of India-Us Trade Flows," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 37(1), pages 29-51, March.
    3. Natalya Ketenci & Idil Uz, 2011. "Bilateral and regional trade elasticities of the EU," Empirical Economics, Springer, vol. 40(3), pages 839-854, May.
    4. Tiwari, Aviral & Shahbaz, Muhammad, 2011. "India's trade with USA and her trade balance: An empirical analysis," MPRA Paper 29023, University Library of Munich, Germany.
    5. Kyophilavong, Phouphet & Shahbaz, Muhammad & Uddin, Gazi Salah, 2013. "Does J-curve phenomenon exist in case of Laos? An ARDL approach," Economic Modelling, Elsevier, vol. 35(C), pages 833-839.
    6. repec:bla:worlde:v:40:y:2017:i:10:p:2226-2254 is not listed on IDEAS
    7. Mohsen Bahmani-Oskooee & Rustam Jamilov, 2014. "Export diversification and the S-curve effect in a resource-rich state: evidence from Azerbaijan," Economic Change and Restructuring, Springer, vol. 47(2), pages 135-154, May.
    8. Wang, Chun-Hsuan & Lin, Chun-Hung A. & Yang, Chih-Hai, 2012. "Short-run and long-run effects of exchange rate change on trade balance: Evidence from China and its trading partners," Japan and the World Economy, Elsevier, vol. 24(4), pages 266-273.
    9. Kurtovic, Safet & Halili, Blerim & Maxhuni, Nehat, 2016. "Bilateral Trade Elasticity: B&H versus its seven trade partners," MPRA Paper 72297, University Library of Munich, Germany.
    10. Dan Lupu & Mircea Asandului, 2014. "Exchange Rate and Trade: J-curve in European Union," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 10(3), pages 136-145, June.
    11. Muhammad Shahbaz & Faridul Islam & Naveed Aamir, 2012. "Is devaluation contractionary? Empirical evidence for Pakistan," Economic Change and Restructuring, Springer, vol. 45(4), pages 299-316, November.
    12. Shahbaz, Muhammad & Jalil, Abdul & Islam, Faridul, 2010. "Real Exchange Rate Changes and Trade Balance in Pakistan: A Revisit," MPRA Paper 27631, University Library of Munich, Germany.
    13. repec:bla:rdevec:v:21:y:2017:i:4:p:e30-e46 is not listed on IDEAS
    14. repec:bla:econpa:v:36:y:2017:i:2:p:198-222 is not listed on IDEAS
    15. Perekunah Eregha & Arcade Ndoricimpa & Solomon Olakojo & Mamello Nchake & Owen Nyang'oro & Edith Togba, 2016. "Nigeria: Should the Government Float or Devalue the Naira?," African Development Review, African Development Bank, vol. 28(3), pages 247-263, September.
    16. repec:eee:ecosys:v:41:y:2017:i:2:p:279-296 is not listed on IDEAS
    17. BAHMANI-OSKOOEE, Mohsen & HALICIOGLU, Ferda & GHODSI, Seyed Hesam, 2016. "Asymmetric Effects of Exchange Rate Changes on British Bilateral Trade Balances," MPRA Paper 73477, University Library of Munich, Germany.
    18. Mohsen Bahmani & Hanafiah Harvey & Scott W. Hegerty, 2013. "Empirical tests of the Marshall-Lerner condition: a literature review," Journal of Economic Studies, Emerald Group Publishing, vol. 40(3), pages 411-443, May.

    More about this item

    Keywords

    J-curve; co-integration; stability tests; Turkey;

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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