Regional real effective exchange rates and regional export relationship for Turkey

In this thesis, whether there is a relationship between regional real effective exchange rates (REER) and regional export performance is studied. Monthly CPI based regional real effective exchange rates and export data from first quarter of 2003 to fourth quarter of 2015 is modeled similarly with previous literarature and it is tried to measure the explanatory power of real exchange rates for export performance. In the first part of the study, real effective exchange rates and calculation of regional real effective exchange rates is described. In the second part, Tukey's export performance and export structure is analyzed. Finally, export and REER data is modeled using VAR method and it is tried to understand whether real effective exchange rates has a meaningful effect on export performance. The analysis showed that there is a negative relationship for some regions between real effective exchange rates and exports in line with the theoretical expectations. However, the the relationship is weaker than expected. Keywords: real effective exchange rate, export, CPI, MENA, VAR