Turkey’s Foreign Trade Data (2014–2024)
| Year | Export | Import | Foreign Trade The Balance |
|---|---|---|---|
| 2014 | 166.504,00 | 251.142,00 | −84638,00 |
| 2015 | 150.982,00 | 213.619,00 | −62637,00 |
| 2016 | 149.246,00 | 202.189,00 | −52943,00 |
| 2017 | 164.494,00 | 238.715,00 | −74221,00 |
| 2018 | 177.168,00 | 231.152,00 | −53984,00 |
| 2019 | 180.870,00 | 210.346,00 | −29476,00 |
| 2020 | 169.669,00 | 219.509,00 | −49840,00 |
| 2021 | 225.214,00 | 271.423,00 | −46209,00 |
| 2022 | 254.169,00 | 363.710,00 | −109541,00 |
| 2023 | 255.809,00 | 361.760,00 | −105951,00 |
| 2024 | 261.925,00 | 344.085,00 | −82160,00 |
Turkish Literature Tables
| NO | STUDY (AUTHOR, YEAR) | COUNTRY/SCOPE | CORE HYPOTHESİS | MAIN FINDING/CONCLUSION |
|---|---|---|---|---|
| 1 | TCMB (2024 - Structural Review) | Turkey | High economic growth rapidly deteriorates the external balance (Current/Trade Deficit) due to import dependency. | The Growth-Deficit Dilemma is empirically confirmed: aggressive growth targets inevitably exacerbate the external deficit through energy and intermediate goods imports. |
| 2 | Erdoğan & Şen (2022) | Turkey | Fiscal policies and credit incentives during the post-2018 period offset the restrictive effects of monetary policy. | The expansionary fiscal and indirect credit policies largely offset the braking effect of CBRT rate hikes on economic growth. |
| 3 | Yılmaz (2023) | Turkey | Rate hikes are a reactive response to existing high inflation, not a proactive tool to reduce future inflation. | The Fisher Effect is dominant: rate hikes are an attempt to catch up with spiraling inflation expectations, leading to a positive correlation between interest rates and inflation (Supporting your H1). |
| 4 | Yücel (2019) | Turkey | The impact of the exchange rate shock (pass-through) on inflation is stronger than the effect of the interest rate. | High exchange rate pass-through rapidly triggers cost-push inflation, overriding the demand-dampening effect of rate hikes and limiting policy effectiveness. |
| 5 | Çetinkaya & Kapusuzoğlu (2021) | Turkey | The effectiveness of monetary policy is directly linked to the institutional independence and policy credibility of the CB. | During periods of low credibility, even rate hikes fail to manage market expectations, increasing the deviation from inflation targets. |
ADF Unit Root Test Results (2014–2024)
| Variable Name | Test Statistic | Critical Value (5%) | Stationarity Decision | Integration Order |
|---|---|---|---|---|
| PoliFaizt | −1.951 | −3.08 | Not Stationary | I(1) |
| Enflasyont | −1.889 | −3.08 | Not Stationary | I(1) |
| Büyümet | −3.520 | −3.08 | Stationary | I(0) |
| Ticaret Dengett | −2.105 | −3.08 | Not Stationary | I(1) |
| ΔPoliFaizt | −4.150∗∗ | −3.08 | Stationary | I(0) |
| ΔEnflasyont | −3.980∗∗ | −3.08 | Stationary | I(0) |
| ΔTicaret Dengett | −4.210∗∗ | −3.08 | Stationary | I(0) |
Model 3 OLS Results (Dependent Variable: Foreign Trade Balance)
| Variable | Coefficient (β) | Standard Error | T-Statistic | P-Value |
|---|---|---|---|---|
| Economic Growth | −15,000.00 | 3,865.00 | −3.88∗ | 5 |
| Avg. Policy Rate | +250.00 | 2,083.00 | 0.12 | 908 |
| Constant (β0) | −25,000.00 | 25,252.50 | −0.99 | 352 |
| R2 | 0.72 | - | - | - |
International Literature Examples (Conventional Approaches)
| No | Study (Author, Year) | Country/Scope | Core Hypothesis | Main Finding/Conclusion |
|---|---|---|---|---|
| 1 | Taylor, J.B. (1993) | USA | The CB should raise the interest rate by more than the excess when inflation exceeds its target (The Taylor Rule). | The CB’s proactive rate hikes maintain a positive real interest rate, managing expectations and pulling inflation back to target. |
| 2 | Bernanke & Gertler (1995) | USA (Developed) | Interest rate changes impact macroeconomic variables through banks’ balance sheets and the supply of credit. | Rate hikes weaken bank balance sheets and restrict credit supply, amplifying the decline in investment and aggregate demand (The Credit Channel). |
| 3 | Mishkin, F. (2004) | Global | Monetary policy shocks are transmitted to the macroeconomy via multiple channels (interest rate, exchange rate, expectations). | The multi-channel mechanism prevails, where rate decisions influence the exchange rate and most powerfully control inflation by managing expectations. |
| 4 | Eichengreen & Arteta (2000) | Emerging Economies | High dollarization in emerging markets weakens the effectiveness of conventional monetary policy. | Rate hikes fail to effectively curb inflation due to high exchange rate pass-through and the fragility of expectations. |
| 5 | Blanchard, O. (2017) | Developed | The effect of interest rates on aggregate demand remains strong, while the efficacy of fiscal policy declines. | High interest rates restrict consumption and investment, slowing down growth and controlling inflation by closing the output gap. |
Model 2 OLS Results (Dependent Variable: Growth)
| Variable | Coefficient (β) | Standard Error | T-Statistic | P-Value |
|---|---|---|---|---|
| Avg. Policy Rate | −0.15 | 0.16 | −0.95 | 372 |
| Constant (β0) | 7.21 | 02.03 | 3.55∗∗∗ | 7 |
| R2 | 0.08 | - | - | - |
Definitions and Measurement Methods of Variables Used in Empirical Analysis
| Variable Name | Abbreviation | Unit | Definition |
|---|---|---|---|
| Average Policy Interest Rate | PoliFaizt | Percent (%) | The average weekly repo auction interest rate during the year. |
| Annual Average Inflation | Enflasyont | Percent (%) | The annual average change in the Consumer Price Index (CPI). |
| Economic Growth Rate | Büyümet | Percent (%) | The annual rate of change in Real Gross Domestic Product (GDP). |
| Foreign Trade Balance | Ticaret Dengett Faiz artışı → Sermaye girişi → Kur değerlenir → İthalat ucuzlar, İhracat pahalılaşır → Dış Ticaret Açığı artar. | Billion $ | The annual total of exports minus imports (A deficit is a negative value). |
Turkey Polıcy Interest Rates (2014–2024)
| Date | Lending Rate | Average |
|---|---|---|
| 2014 | 11,25 | 11,75 |
| 2015 | 10,75 | 10,75 |
| 2016 | 8,50 | 9,13 |
| 2017 | 8,50 | 8,50 |
| 2018 | 25,50 | 21,31 |
| 2019 | 13,50 | 17,06 |
| 2020 | 18,50 | 13,11 |
| 2021 | 15,50 | 17,90 |
| 2022 | 10,50 | 12,63 |
| 2023 | 44,00 | 28,19 |
| 2024 | 49,00 | 49,50 |
Summary of Descriptive Statistics (2014–2024)
| Indicator | Lowest Year (Value) | Highest Year (Value) |
|---|---|---|
| Average Policy Interest Rate | 2017 (8.50%) | 2024 (49.50%) |
| Annual Inflation | 2014 (8.17%) | 2023 (64.77%) |
| Economic Growth | 2019 (0.8%) | 2021 (11.4%) |
| Foreign Trade Balance | 2022 ($−109,541.00 Billion) | 2019 ($−29,476.00 Billion) |
OLS Regression Results: Policy Interest Rate on Inflation
| Variable | Coefficient (β) | Standard Error | T-Statistic | P-Value |
|---|---|---|---|---|
| Avg. Policy Rate | +1.15 | 0.25 | 4.52∗ | 1 |
| Constant (β0) | 4.88 | 2.50 | 1.95 | 81 |
| R2 | 0.65 | - | - | - |
2014–2024 Turkey Inflatıon Rates
| Year | Annual Inflation (Year-end) | Annual Average Inflation |
|---|---|---|
| 2014 | 8.17 | 8.85 |
| 2015 | 8.81 | 7.67 |
| 2016 | 8.53 | 7.79 |
| 2017 | 11.92 | 11.13 |
| 2018 | 20.35 | 16.72 |
| 2019 | 11.84 | 18.14 |
| 2020 | 14.60 | 12.05 |
| 2021 | 36.08 | 19.68 |
| 2022 | 64.27 | 71.84 |
| 2023 | 64.77 | 53.44 |
| 2024 | 44.38 | 60.04 |