AN ECONOMETRIC ANALYSIS OF THE IMPACTS FOREIGN TRADE POLICIES ON ECONOMIC GROWTH IN TURKEY COVERING THE YEARS 1960-2009

This study investigates the causal relationship between economic growth and foreign trade (import and export) in the period between 1960 and 2009 in Turkey's economy. GNP, import and export data is used in the study. Short and long term growth relationship has been demonstrated by using the ADF, PP and KPSS unit root tests, Granger causality and Toda-YamamotoDolado-Lütkepohl (MWALD) causality tests. Moreover; Zivot-Andrews breaking test is also used. Short and long term relationships are examined in Granger causality tests and MWALD causality tests. While Granger causality tests allow for "Short-term" causality analysis, MWALD causality tests allow for "Long-term" causality analysis. In the empirical study on Turkey, a positive and significant one-way causal relationship from exports toward economic growth has been found. Furthermore a bidirectional and positive correlation has been found in the short and long-term causal relationship between imports and economic growth. According to the ZivotAndrews breaking test the breaking years are 1999 in import and 2001 in export.

Keywords:

Economic Growth, Export, Import, Foreign Trade Capacity, Foreign Trade Theories, Granger Causality Test, TodaYamamoto(MWALD) Causality Tests, Zivot-Andrews Breaking Test.