Affiliation:
1. ISTANBUL AYDIN UNIVERSITY
Abstract
The value of the Turkish currency decreased by 44% in 2021. The trade balance was directly impacted by exchange rate fluctuation. Moreover, COVID-19 had a significant impact on the trade balance globally as well as in Turkey. In this study, we attempt to assess how COVID-19 has affected trade between Turkey and the EU27 counties. We employ the J-curve and S-curve approaches using various samples and sub-samples. Before examining how COVID-19 influences trade balances, we first looked at the long-term relationship of bilateral trade between Turkey and the EU27, including the impact of the real exchange rate on the trade balance. The findings indicate that, first; there is no indication of a J-curve or an S-curve in Turkey’s trade balance. Second, the Turkish trade balance benefited more from a real fall of the Turkish currency during the pandemic era. In comparison to pre-pandemic correlations, the pandemic cross-correlation coefficients are lower. Despite some delays, it turned out well. The Turkish trade balance is improved by the weakening of the Turkish Lira and the effects of COVID-19 during the pandemic, even if there is no indication of a J-curve or an S-curve.
Subject
Computer Networks and Communications,Hardware and Architecture,Software
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