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Journals / Journal of Economics Finance and Accounting / 2026 / Volume: 5 Issue: 2

IS HARBERGER-LAURSEN-METZLER HYPOTHESIS VALID IN TURKEY?

Okyay Ucan0000-0001-5221-4682
Ayse Ergin Unal0000-0001-6551-8933
Pages
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Publication Date
2018-07-13
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AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

Moreover, there is a short-term unilateral causality from foreign trade balance to terms of trade.

📌 3 Key Takeaways

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Objective & Hypothesis: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.
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Key Findings & Data: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.
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Conclusion & Impact:Moreover, there is a short-term unilateral causality from foreign trade balance to terms of trade.
🔬Design:Research Article
📍Scope:2005 Verileri
⚙️Variables:Terms of trade · balance of trade · cointegration

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.

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Cite This Article

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

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