The Effect of Exchange Rate Volatility on Turkey’s Agricultural Foreign Trade

Abstract

In this study, impact of the real effective exchange rate (REER) and its volatility (REERV) on Turkey's agricultural foreign trade was investigated. 25importantcountries in agricultural trade of Turkey and 1990-2012 periods were examined, and panel data analysis was used in this research. IGARCH model was applied to obtain for the REERV. Influence of the REER and REERV on Turkey's agricultural trade was analyzed whit FMOLS model both individual country and groups panel. According to the results of FMOLS model; It was determined that Turkey agricultural import (7.61%) and export (2.24%) were increased when the REER was risen about 1%. The agricultural import was decreased 18.83% in case the REERV was increased 1%. On the other hand, when the REERV was increased around 1%, there was no significantly relationship between agricultural export and REERV. As a result, it can be stated that REER and REERV were caused an imbalance on Turkey's agricultural foreign trade. Agricultural producers and industrialists are often adversely affected by the REERV. For these reasons, it is important to take protective measures for them.

Keywords

• Panel Veri Analizi
• Döviz Kuru
• Tarımsal Dış Ticaret
• Oynaklık
• FMOLS.