Revisiting the role of exchange rate volatility in Turkey’s exports: Evidence from the structural VAR approach

Abstract

The exchange rate is both an important economic variable when determining a country’s export volume and an indicator of its international competitiveness. This paper re-investigates the impact of real exchange rate volatility on Turkey’s exports using the structural vector autoregression method and monthly data from 2003:01 to 2019:12. Empirical evidence shows that real exchange rate and exchange rate volatility do not affect exports in Turkey. On the other hand, external income has had a slight effect on Turkey’s exports in the post-global-crisis period. The findings show that other factors which effect macroeconomic indicators in the Turkish economy should also be considered.

Keywords

• exchange rate volatility, exports, svar, structural breaks, turkey