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IS HARBERGER-LAURSEN-METZLER HYPOTHESIS VALID IN TURKEY?

Year 2018, Volume: 5 Issue: 2, 152 - 159, 13.07.2018

Okyay Ucan , Ayse Ergin Unal

https://doi.org/10.17261/Pressacademia.2018.821

Abstract

Purpose- In so far as financial development that supports the supply-side view as well as the country’s competitiveness, a rapid increase in import price index in comparison to the export price index brings forth the deterioration regarding trade. A similar case also exists in Turkey. The aim of the study is to test the relationship between foreign trade balance and terms of trade in Turkey.

Methodology- In this study, the monthly data of terms of trade and foreign trade balance for the period 2005: M1 - 2017: M4 are analyzed for Turkey, and the validity of Harberger-Laursen-Metzler Hypothesis is tested.

Findings- The deviations in the short run converge to the long-term equilibrium in approximately 6 months period. In addition, considering the normalized long-term relationship, the 1-unit increase in the terms of trade would cause an average increase of $ 321,335 in the estimated dependent variable, namely, the foreign trade balance.

Conclusion- There exists a long-term relationship between the variables, namely, terms of trade and foreign trade balance. Moreover, there is a short-term unilateral causality from foreign trade balance to terms of trade.

Keywords

Terms of trade balance of trade cointegration Harberger-Laursen-Metzler Hypothesis

References

  • Aslan N. and Yörük, D. (2008). Teori ve Uygulamada Dış Ticaret Hadleri ve Kalkınma İlişkisi. Marmara Üniversitesi İİBF Dergisi. 25(2): 33-69.
  • Bekar, S. Akbulut and Terzi, H. (2016). Dış Ticaret Haddi’nin Dış Ticaret Dengesine Etkisi: Türkiye’deki Endüstriler İçin “S Eğrisi Yaklaşımı”nın Geçerliliği. Dokuz Eylül Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 31(2): 95-114.
  • Bouakez, H. (2008). Terms of Trade and Current Account Fluctuations: The HArberger- Laursen Metzler Effect Revisited. Journal of Macroeconomics. 30(1): 260-281.
  • Brueckner, M. Carneiro, F. (2017). Terms of trade volatility, government spending cyclicality, and economic growth. Review of International Economics. 25(5): 975-989.
  • Choi, J., Hur. J. and Kang. M. (2017). Dissecting the Effects of Terms of Trade Shocks on the Korean Economy, Emerging Markets and Finance & Trade. 53: 1199-1216.
  • Dikmen, N. (2012). Ekonometri Temel Kavramlar ve Uygulamalar (2 Ed.). Bursa: Dora Basım Yayın Dağıtım.
  • Ergin, A. and Yetiz, F. (2017). The Relationship among Gross Barter Terms of Trade, Exchange Rates, and Economic Growth: A Case in Turkey. IJEFI. 7(3): 738-745.
  • Esen, Ö. (2012). Türkiye’de Döviz Kuru Belirsizliğinin İhracat Üzerine Etkisi. Finans Politik ve Ekonomik Yorumlar. 49(568): 87-97.
  • Granger, C. (1988). Causality, Cointegration and Control. Journal of Economic Dynamics and Control. 12: 551-559.
  • Harberger, A. C. (1950). Currency depreciation, income, and the balance of trade. Journal of Political Economy 58:47–60.
  • Hepaktan, C.E. and Karakayalı H. (2009). 1980-2008 Döneminde Türkiye’nin Dış Ticaret Hadlerinin Analizi. Celal Bayar Üniversitesi Sosyal Bilimler Dergisi. 7(2): 181-210.
  • Szomolányi. K. Lukáčik. M. and Lukáčiková A. (2017). Impact of Terms-of-Trade on Slovakia, the Czech Republic, and Croatia in the Short Run Our Economy (Nase Gospodarstvo). 63(1): 3-13.
  • Küçükaksoy İ. and Çiftçi, İ. (2014). Dış Ticaret Hadlerinin Dış Ticaret Dengesine Etkisi: Harberger-Laursen-Metzler Hipotezinin Türkiye Uygulaması. Optimum Ekonomi ve Yönetim Bilimleri Dergisi.1(2): 103-129.
  • Lars, E., Svensson, O. and Razin, A. (1983). The Terms of Trade and the Current Account: The Harberger- Laursen- Metzler Effect. Journal of Political Economy.91(1).
  • Laursen, S. and Metzler, L.A. (1950). Flexible Exchange Rate and The Theory Of Employment. The Review of Economics and Statistics. 32(4), 281-299.
  • Mansoorian, A. (1993). Habit Persistence and The Harberger-Laursen-Metzler Effect in an Infinite Horizon Model. Journal of International Economics. 34(1-2): 153-166.
  • Misztal, P. (2009). The Harberger-Laursen-Metzler Effect: Theory and Practice in Poland. The Romanian Economic Journal. 38: 129-146.
  • Oktar, S. and Dalyancı, L. (2012). Dış Ticaret Hadlerinin Cari İşlemler Dengesi Üzerindeki Etkisi: Türkiye Örneği. Marmara Üniversitesi İ.İ.B Dergisi. 33(2): 1-18.
  • Otto, G. (2003). Terms of trade shocks and the balance of trade: there is a Harberger-Laursen-Metzler effect. Journal of International Money and Finance. 22(2): 155-184.
  • Parasız, İ. ve Ekren, N. (2013). Uluslararası İktisat. Bursa: Ezgi Kitabevi.
  • Seyidoğlu, H.( 2007). Uluslararası İktisat(16. Baskı). İstanbul: Güzem Can Yayınları.
  • Uçan, O. (2013). Döviz Kuru Dinamikleri(1. Baskı). Ankara: Seçkin Yayınları.
  • Yamak, R. and Korkmaz, A. (2006). Harberger-Laursen-Metzler Etkisi: Literatür ve Türkiye Örneği. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi. 20(1): 57-69.

Year 2018, Volume: 5 Issue: 2, 152 - 159, 13.07.2018

Okyay Ucan , Ayse Ergin Unal

https://doi.org/10.17261/Pressacademia.2018.821

Abstract

References

  • Aslan N. and Yörük, D. (2008). Teori ve Uygulamada Dış Ticaret Hadleri ve Kalkınma İlişkisi. Marmara Üniversitesi İİBF Dergisi. 25(2): 33-69.
  • Bekar, S. Akbulut and Terzi, H. (2016). Dış Ticaret Haddi’nin Dış Ticaret Dengesine Etkisi: Türkiye’deki Endüstriler İçin “S Eğrisi Yaklaşımı”nın Geçerliliği. Dokuz Eylül Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi, 31(2): 95-114.
  • Bouakez, H. (2008). Terms of Trade and Current Account Fluctuations: The HArberger- Laursen Metzler Effect Revisited. Journal of Macroeconomics. 30(1): 260-281.
  • Brueckner, M. Carneiro, F. (2017). Terms of trade volatility, government spending cyclicality, and economic growth. Review of International Economics. 25(5): 975-989.
  • Choi, J., Hur. J. and Kang. M. (2017). Dissecting the Effects of Terms of Trade Shocks on the Korean Economy, Emerging Markets and Finance & Trade. 53: 1199-1216.
  • Dikmen, N. (2012). Ekonometri Temel Kavramlar ve Uygulamalar (2 Ed.). Bursa: Dora Basım Yayın Dağıtım.
  • Ergin, A. and Yetiz, F. (2017). The Relationship among Gross Barter Terms of Trade, Exchange Rates, and Economic Growth: A Case in Turkey. IJEFI. 7(3): 738-745.
  • Esen, Ö. (2012). Türkiye’de Döviz Kuru Belirsizliğinin İhracat Üzerine Etkisi. Finans Politik ve Ekonomik Yorumlar. 49(568): 87-97.
  • Granger, C. (1988). Causality, Cointegration and Control. Journal of Economic Dynamics and Control. 12: 551-559.
  • Harberger, A. C. (1950). Currency depreciation, income, and the balance of trade. Journal of Political Economy 58:47–60.
  • Hepaktan, C.E. and Karakayalı H. (2009). 1980-2008 Döneminde Türkiye’nin Dış Ticaret Hadlerinin Analizi. Celal Bayar Üniversitesi Sosyal Bilimler Dergisi. 7(2): 181-210.
  • Szomolányi. K. Lukáčik. M. and Lukáčiková A. (2017). Impact of Terms-of-Trade on Slovakia, the Czech Republic, and Croatia in the Short Run Our Economy (Nase Gospodarstvo). 63(1): 3-13.
  • Küçükaksoy İ. and Çiftçi, İ. (2014). Dış Ticaret Hadlerinin Dış Ticaret Dengesine Etkisi: Harberger-Laursen-Metzler Hipotezinin Türkiye Uygulaması. Optimum Ekonomi ve Yönetim Bilimleri Dergisi.1(2): 103-129.
  • Lars, E., Svensson, O. and Razin, A. (1983). The Terms of Trade and the Current Account: The Harberger- Laursen- Metzler Effect. Journal of Political Economy.91(1).
  • Laursen, S. and Metzler, L.A. (1950). Flexible Exchange Rate and The Theory Of Employment. The Review of Economics and Statistics. 32(4), 281-299.
  • Mansoorian, A. (1993). Habit Persistence and The Harberger-Laursen-Metzler Effect in an Infinite Horizon Model. Journal of International Economics. 34(1-2): 153-166.
  • Misztal, P. (2009). The Harberger-Laursen-Metzler Effect: Theory and Practice in Poland. The Romanian Economic Journal. 38: 129-146.
  • Oktar, S. and Dalyancı, L. (2012). Dış Ticaret Hadlerinin Cari İşlemler Dengesi Üzerindeki Etkisi: Türkiye Örneği. Marmara Üniversitesi İ.İ.B Dergisi. 33(2): 1-18.
  • Otto, G. (2003). Terms of trade shocks and the balance of trade: there is a Harberger-Laursen-Metzler effect. Journal of International Money and Finance. 22(2): 155-184.
  • Parasız, İ. ve Ekren, N. (2013). Uluslararası İktisat. Bursa: Ezgi Kitabevi.
  • Seyidoğlu, H.( 2007). Uluslararası İktisat(16. Baskı). İstanbul: Güzem Can Yayınları.
  • Uçan, O. (2013). Döviz Kuru Dinamikleri(1. Baskı). Ankara: Seçkin Yayınları.
  • Yamak, R. and Korkmaz, A. (2006). Harberger-Laursen-Metzler Etkisi: Literatür ve Türkiye Örneği. Atatürk Üniversitesi İktisadi ve İdari Bilimler Dergisi. 20(1): 57-69.
There are 23 citations in total.

Details

Primary Language English
Journal Section Articles
Authors

Okyay Ucan 0000-0001-5221-4682

Ayse Ergin Unal This is me 0000-0001-6551-8933

Publication Date July 13, 2018
Published in Issue Year 2018 Volume: 5 Issue: 2

Cite

APA Ucan, O., & Unal, A. E. (2018). IS HARBERGER-LAURSEN-METZLER HYPOTHESIS VALID IN TURKEY?. Journal of Economics Finance and Accounting, 5(2), 152-159. https://doi.org/10.17261/Pressacademia.2018.821

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