The development of terms of trade and trend case study of Turkey

ABSTRACT Turkey has experienced a sharp foreign trade liberation since 1980. At the same time international trade has improved significantly, some new concepts like globalization and protection of the regional markets have began take to play an important role in the economic literature simultaneously. In the international field, inter- industry trade has a major percentage share of the world trade; Singer-Prebisch thesis which has claimed first in the 1950's that terms of trade has been deteriorating for the exporters of basic goos is an important alternative to these developments discussed above. Developed countries had been putting pressure on developing countries during GAAT rounds. This pressure has lead to both the oretical and emprical studies about least developed countries foreign trade problems. In this study, we hava used the Singer-Prebisch thesis to analyse whether terms of trade improve against developing countries utilising the 1969-1998 observations of Turkey's terms of trade. In addition to we hava figured out the income effect of Turkey's foreign trade and we regressed the trend of Turkey's terms of trade to forecast the figures of the years 1999, 2000, 2005, 2010. ii