The Real Effective Exchange Rate and Industrial Employment: The Turkish Case

Özet

: This study investigates the relationship between industrial employment andproducer price index-based real effective exchange rate, over the period 2009M01-2019M10, by employing the autoregressive distributed lag cointegration procedure, forthe Turkish economy. The empirical findings support the existence of a positiverelationship between the appreciation of the producer price index-based real effectiveexchange rate and an increase in industrial employment. Accordingly, a 1% appreciationof the producer price index-based real effective exchange rate leads to a 0.092%increase in industrial employment. This finding supports the dominance of the“imported input” channel over the other transmission channels for Turkey at theindustry level.