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Business Cycle Synchronization of Turkey with Euro Area and the US : What Has Changed After 2001?


  • Huseyin Cagri Akkoyun
  • Mahmut Gunay
  • Bahar Sen-Dogan


In this paper, we make a detailed spectral analysis of the comovement of cycles of Turkish economy with cycles of euro area and the US. Relation between cycles may change with frequency, hence correlation of cycles at short, medium and long run may differ. Also, the correlation in different frequencies may change over time. Structural transformation observed in the Turkish economy after 2001 should also be taken into account in the analysis of business cycle synchronization. So, we use wavelet methodology that enables us to decompose cycles into different frequencies and also the method can deal with non-stationary data with structural change. We find that correlations of Turkish cycles with the cycles of euro area and the US increased after 2001. Moreover, although trade intensity of Turkish economy with euro area is much higher than with the US, in general, correlations of Turkish cycles with the US cycles are not lower than the euro cycles. Therefore, our results suggest that attention should not be limited to direct trade channel when analyzing effect of international developments on the Turkish economy.

Suggested Citation

  • Huseyin Cagri Akkoyun & Mahmut Gunay & Bahar Sen-Dogan, 2012. "Business Cycle Synchronization of Turkey with Euro Area and the US : What Has Changed After 2001?," Working Papers 1215, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
  • Handle: RePEc:tcb:wpaper:1215

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    Cited by:

    1. Mehmet Fatih Ekinci & Gazi Kabas & Enes Sunel, 2013. "End-Point Bias in Trend-Cycle Decompositions : An Application to the Real Exchange Rates of Turkey," Central Bank Review, Research and Monetary Policy Department, Central Bank of the Republic of Turkey, vol. 13(3), pages 61-71.
    2. RNuket Kirci Cevik & Sel Dibooglu & Ali M. Kutan, 2016. "Real and Financial Sector Studies in Central and Eastern Europe: A Review," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 66(1), pages 2-31, February.
    3. Sofia Gouveia, 2014. "Business cycle correlation between the Euro area and the Balkan countries," International Journal of Business and Economic Sciences Applied Research (IJBESAR), Eastern Macedonia and Thrace Institute of Technology (EMATTECH), Kavala, Greece, vol. 7(1), pages 33-49, April.
    4. P. Fulya Gebeşoğlu & Hasan Murat Ertuğrul, 2014. "GDP Volatility Spillovers from the US and EU to Turkey: A Dynamic Investigation," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 3(2), pages 51-66, May.

    More about this item


    Business Cycle; Wavelet; Structural Change;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

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