The impact of exchange rate on economic growth: Example of Turkey

Exchange rate; It is defined as the price of one country's currency in another currency. Exchange rate fluctuation or stability is the main problem that determines the quantum and direction of economic growth. Exchange rate fluctuation is defined as the risk associated with unpredictable movements in the exchange rate. So these issues, both in developed economies emerges as a significant issue for emerging economies such as Turkey. The aim of this study is to determine the effect of exchange rates in Turkey on economic growth. In this regard, between 2003Q1 and 2019Q4, quarterly data were analyzed with the help of the Vector Autoregressive method and in the findings; the decline in the exchange rate or reducing policies in Turkey, it was found that a positive impact on economic growth. The binders of this result are the decisive aspect of trade in exchange rates. In other words, the findings were observed to be compatible with the theoretical framework.