Denomination composition of trade and trade balance: evidence from Turkey

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Berument H., Dinçer N. N.

APPLIED ECONOMICS, vol.37, no.10, pp.1177-1191, 2005 (SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 37 Issue: 10
  • Publication Date: 2005
  • Doi Number: 10.1080/00036840500109159
  • Journal Name: APPLIED ECONOMICS
  • Journal Indexes: Social Sciences Citation Index (SSCI), Scopus
  • Page Numbers: pp.1177-1191
  • TED University Affiliated: No

Abstract

The currency denominations of a country's exports and imports are not necessarily the same. If this is the case, then a change in the exchange rate parity among major currencies will affect the trade balance. The empirical evidence provided from Turkey - where exports are mostly denominated in Euros and imports are mostly denominated in USD - suggests that an appreciation of the Euro against the USD would increase the output in the long-run, appreciate the local currency and improve the trade balance for the 1985:01 2003:07 period.