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Output, the Real Exchange Rate, and the Crises in Turkey

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  • Ardic, Oya Pinar

Abstract

Since the 1980s, most emerging economies have experienced economic crises associated with large, prolonged current account deficits and real exchange rate misalignment. Eventually these governments ended up devaluing national currencies. Empirical evidence from developing countries suggests that devaluation, in most cases, have been contractionary due to demand-side and supply-side effects. This paper studies the Turkish experience since the 1980s, and based on the results of a VAR analysis, finds that devauations were indeed contractionary.

Suggested Citation

  • Ardic, Oya Pinar, 2006. "Output, the Real Exchange Rate, and the Crises in Turkey," MPRA Paper 6099, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:6099
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    1. Oya Celasun & R. Gaston Gelos & Alessandro Prati, 2004. "Would "Cold Turkey" Work in Turkey?," IMF Staff Papers, Palgrave Macmillan, vol. 51(3), pages 493-509, November.
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    8. Edwards, Sebastian & van Wijnbergen, Sweder, 1989. "Disequilibrium and structural adjustment," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 2, chapter 28, pages 1481-1533, Elsevier.
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    Cited by:

    1. Ugurlu, Erginbay, 2006. "Real Exchange Rate And Economic Growth: Turkey," MPRA Paper 60343, University Library of Munich, Germany, revised 2009.

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    More about this item

    Keywords

    Turkey; real exchange rate; crisis; contractionary devaluations;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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