The Real Effective Exchange Rate and Industrial Employment: The Turkish Case

Article Information
Journal: Business and Economics Research Journal
Title of Article: The Real Effective Exchange Rate and Industrial Employment: The Turkish Case
Author(s): Resat Can Akkay
Volume: 12
Number: 3
Year: 2021
Page: 491-507
ISSN: 2619-9491
DOI Number: 10.20409/berj.2021.334
Abstract
This study investigates the relationship between industrial employment and producer price index-based real effective exchange rate, over the period 2009M01-2019M10, by employing the autoregressive distributed lag cointegration procedure, for the Turkish economy. The empirical findings support the existence of a positive relationship between the appreciation of the producer price index-based real effective exchange rate and an increase in industrial employment. Accordingly, a 1% appreciation of the producer price index-based real effective exchange rate leads to a 0.092% increase in industrial employment. This finding supports the dominance of the “imported input” channel over the other transmission channels for Turkey at the industry level.

Keywords: Real Effective Exchange Rate, Industrial Employment, ARDL Model, Aggregation Bias, Turkey

JEL Classification: E24, F31, C22

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