The relationship between trade liberalization and economic growth in Turkey: An empirical analysis

In the 1980s, liberal policies that emerge in the context of the globalization have effected many countries. Globalization which is effective especially in the economic field has shown up the liberalization concept and also this liberalization has examined the concept of trade liberalization. The idea of trade liberalisation, which has a considerable history of theoretical basis, has become important especially after the collapse of Bretton- Woods system which was present early in 1970s and has emanated all over the world in the second half of 1980s and in 1990s. The aim of this study is to investigate the effects of trade liberalization with the globalization process. This study examines the effects of trade liberalization policies on economic growth in Turkish economy by using annual data. This study is composed of three main parts. In the first part, firtsly the trade liberalization has been expressed conceptually after that, theoretical approachest to trade liberalization has been described and channels of trade liberalization affect economic growth has been evaluated. In the second part; trade liberalization oriented reforms in the Turkish economy has been discussed and the results brought by these reforms has been focused on. In the last part of the study, the effect of the trade openness rate of 1995- 2015 on the economic growth of the Turkey economy was examined. Dickey-Fuller (1979) unit root test was performed to examine the stability. Following by the relationship between level of trade liberalization and economic growth with Vector Autoregression Method and Granger Causality test with were modelled the finding which has been analyzed. As a result of the econometric analysis, a pozitif and bidirectional relationship between trade liberalization and economic growth has been detected. Keywords: Trade Liberalization, Economic Growth, Dickey-Fuller Unit Root Test, Vector Autoregression Method, Granger Causality Test