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The Effect of Exchange Rates on the International Trade in Turkey

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Abstract (2. Language): 
This study analyzes the impact of exchange rates on Turkey’s international trade pattern. Cointegration and vector error correction model (VECM) procedures are applied on monthly data set covering the period 2003:01-2012:08. One of the main finding of the paper is that exchange rates, exports and imports are cointegrated and, thus, cannot drift too far apart in Turkey. Furthermore, the VECM analysis shows that long run causality runs from exports and imports to exchange rates, and vice versa.
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