Analysis of the relations between the exchange rate and key macro economic indicators by Toda Yamamoto Causes Tests

Changes in macroeconomic indicators are of vital importance especially for the economies of developing countries. In addition, the changes in exchange rates will have a mutual effect with other economic indicators. The main purpose of this study is to test the relations between the main macroeconomic indicators in Turkey. In the study, macroeconomic indicators such as exchange rates, real effective exchange rate, CPI, inflation, time deposit interest rate, balance of payments in Turkey between January 2009 and December 2021 were used as data. The causality relationship was measured by the Toda-Yamamoto causality tests. As a result of the analyzes made; It has been concluded that macroeconomic indicators interact with each other in certain years and do not interact with each other in certain years.