The nexus among competitively valued exchange rates, price level, and growth performance in the Turkish economy: New insight from the global value chains

Currently, global value chains (GVCs) are increasingly shaping the global economy, covering a growing share of international trade, GDP, and employment globally. Global trade is impacted by the emergence of GVCs in areas as diverse as commodities, electronics, and business service outsourcing, among...

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Bibliographic Details
Published inJournal of risk and financial management Vol. 14; no. 11; pp. 1 - 19
Main Authors Shuabiu, Umar Aliyu, Usman, Mohammed A. M, Çavuşoğlu, Behiye
Format Journal Article
LanguageEnglish
Published Basel MDPI 01.11.2021
MDPI AG
Subjects
ARDL bounds test
Banking
Currency
Domestic markets
Economic growth
Economic reform
exchange rate
Exports
Fixed exchange rates
Foreign exchange rates
foreign trade
GDP
Geopolitics
Gross Domestic Product
Industrial production
Inflation
Interest rates
International trade
Literature reviews
Participation
Political risk
Terms of trade
Turkey
Volatility
Saudi Arabia
United States > US
Turkey
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Summary:Currently, global value chains (GVCs) are increasingly shaping the global economy, covering a growing share of international trade, GDP, and employment globally. Global trade is impacted by the emergence of GVCs in areas as diverse as commodities, electronics, and business service outsourcing, among other areas, since the countries involved in the GVCs hold some value(s) and benefit(s) from the exports of the finished product. In this study, the nexus among Competitively Valued Exchange Rates, Price level, and Growth Performance in the Turkish Economy; New insight from the GVCs is investigated using annual data from 1980 to 2020 within the framework of the ARDL bound test, Bayer and Hanck Cointegration (BHC) test, and ECM. The study results revealed that the relationship among real effective exchange rate, exports, and imports induced economic performance and external trade competitiveness particularly when directed at GVCs in both the short and long run. The study recommends that policies enhancing a 10% equilibrium convergence are required annually to competitively minimize the dependence on foreign value-added inputs by importing only world-class inputs for value addition and exports benefits in the competitive GVCs world. Furthermore, monetary policy, GVCs, and economic growth should be investigated.
ISSN:1911-8074
1911-8066
1911-8074
DOI:10.3390/jrfm14110528