EKOIST Journal of Econometrics and Statistics 2651-396X İstanbul Üniversitesi 10.26650/ekoist.2024.40.1354907 Econometrics (Other) Ekonometri (Diğer) Trade Balance, Real Exchange Rate and Trade Policy Uncertainty in Türkiye: Evidence from the SVAR Approach https://orcid.org/0000-0003-1822-9965 Ünlü Fatma ERCIYES UNIVERSITY, FACULTY OF ECONOMICS AND ADMINISTRATIVE SCIENCES, DEPARTMENT OF ECONOMICS 06 26 2024 40 63 75 09 04 2023 03 01 2024 Copyright © 2005, EKOIST Journal of Econometrics and Statistics 2005 EKOIST Journal of Econometrics and Statistics

In recent years, the trade wars, the global economic crisis and protectionist policies have created a climate of trade policy uncertainty in the world economy. The increased uncertainty had important impacts on economic variables, in particular on foreign trade and exchange rates. As a result, the attention of researchers and policy makers has been focused on this area. Also, it is a well-known fact that uncertainties have a greater impact on developing countries with economies that are more vulnerable to shocks and risks. From all of these facts, the aim of this study is to investigate the relationships between exchange rate, trade balance and trade policy uncertainty by using structural VAR (SVAR) analysis for the 1960:Q1-2020:Q4 period in Türkiye. The results show that there exists a significant relationship between trade policy uncertainty, the trade balance and the exchange rate in the long term. The response of trade policy uncertainty to shocks to the trade balance and to the exchange rate is statistically significant and negative. The response of the exchange rate to trade balance shocks is statistically significant and positive. An increase in the trade balance increases the exchange rate and reduces trade policy uncertainty.

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