The relationship between foreign trade, exchange rate and economic growth sample of Turkey 2003-2019

The increases in the production capacities of the countries compared to the previous periods show the speed of the economic growth of those countries. Defended as a mechanism that affects economic growth, foreign trade generally includes trade in goods or services. The main goal in foreign trade is to increase exports, reduce imports and contribute to economic growth. The main instrument used in the purchase and sale of goods or services between countries is exchange rates. In this sense, issues such as foreign trade and economic growth cannot be considered independently in exchange rates. Therefore, it is important to research foreign trade, foreign exchange and economic growth in order to obtain information about the structure of a country's economy and to make predictions about the future.The aim of this study; researches the relationship between foreign trade, exchange rate and economic growth. For this purpose, econometric analysis was carried out with quarterly monthly data of gdp, inflation, real effective exchange rate, export and import variables between 2003-2019. ADF (Extended Dickey-Fuller) and PP (Phillips-Peron) unit root tests have been made stationary by taking first-order differences. Johansen cointegration test was applied to investigate the existence of a long-term relationship. Again, within the scope of VAR model, impulse-response functions were examined and then Granger causality test was applied. As a result of the analysis, there is a long-term relationship between the variables. In addition, it was concluded that while inflation and exports affect national income positively, real effective exchange rate and imports affect negatively.