The J-Curve Dynamics of Turkey: An Application of ARDL Model
نویسندگان
چکیده
This article seeks an empirical evidence for the existence of the J-curve phenomenon both in the short-run and long-run for Turkey over the period 1980-2005. The bounds testing cointegration approach is employed to estimate the trade balance model. An augmented form of Granger causality analysis is implemented between trade balance, real effective exchange rates, foreign income and domestic income. The stability of the short-run as well as long-run coefficients in the trade balance model is tested too. The empirical results suggest that the J-curve phenomenon is supported only in the shortrun. Whilst causality tests reveal mix results, the parameter stability tests seem to be inconclusive.
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