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The Impact of Oil Prices in Turkey on Macroeconomics

Author

Listed:
  • Aktas, Erkan
  • Özenç, Çiğdem
  • Arıca, Feyza

Abstract

This study explores the impact of fluctuations in oil prices on Turkey's economy. The data used in this study covers the years from 1991 to 2008. Macro-economic variables used in this study are GNP, inflation, unemployment and the ratio of exports to imports. VAR model is used in estimating the macro-economic impact of oil prices. Based on the results of the analysis conducted, a meaningful relationship of oil prices with inflation, unemployment and the ratio of exports to imports is estimated. However, it is observed that a rise in oil prices do not have any substantial impact on macro-economic variables. While an inverse relationship of oil prices with the ratio of exports to imports and unemployment is estimated, a direct relationship between oil prices and inflation emerged. The results of impulse-response analysis shows that the responses of macro-economic variables to oil price shocks become stable only after one year.

Suggested Citation

  • Aktas, Erkan & Özenç, Çiğdem & Arıca, Feyza, 2010. "The Impact of Oil Prices in Turkey on Macroeconomics," MPRA Paper 8658, University Library of Munich, Germany, revised 15 Jun 2010.
  • Handle: RePEc:pra:mprapa:8658
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    File URL: https://mpra.ub.uni-muenchen.de/8658/1/MPRA_paper_8658.pdf
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    References listed on IDEAS

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    9. Lorde, Troy & Jackman, Mahalia & Thomas, Chrystol, 2009. "The macroeconomic effects of oil price fluctuations on a small open oil-producing country: The case of Trinidad and Tobago," Energy Policy, Elsevier, vol. 37(7), pages 2708-2716, July.
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    1. repec:ksp:journ1:v:4:y:2017:i:1:p:71-78 is not listed on IDEAS
    2. repec:asi:eneclt:2016:p:17-29 is not listed on IDEAS
    3. repec:eco:journ1:2017-03-2 is not listed on IDEAS

    More about this item

    Keywords

    Oil prices; VAR; Macroeconomics; Turkey;

    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
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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