The effect of uncertainty of economic policy on foreign trade: The case of Türkiye

This study examined the impact of economic and trade policy uncertainties, as well as economic stability, on Turkey's exports and imports using quarterly data from the period 2013-2023. The findings from the models estimated using the quantile regression approach indicate that the real exchange rate has a negative impact on exports, while gross domestic product has a positive impact. The coefficients for global economic policy uncertainties are positive and statistically significant in the higher quantiles of exports, whereas the coefficients for trade policy uncertainties are negative and significant in both the lower and higher quantiles. The coefficient for economic stability is positive and significant in the higher quantiles of exports. When analyzing the quantile regression results for the import demand model, positive and significant coefficients are observed for both the real exchange rate and gross domestic product. Economic policy uncertainty and trade policy uncertainty have negative and statistically significant effects at the lower quantiles of imports. Economic stability is also negative and statistically significant at both the lower and higher quantiles of imports. In this study, where uncertainty and stability are empirically examined, it is determined that foreign trade is affected by issues such as uncertainty and stability in addition to macroeconomic variables. It suggests that policymakers should consider uncertainties alongside macroeconomic factors when analyzing foreign trade.