CHANGES IN EXCHANGE RATES AND THE BALANCE OF TRADE: A LITERATURE SURVEY WITH REFERENCE TO TURKEY’S FOREIGN TRADE

Growing trade deficit has been one of the major problems of the turkish economy since 1950s. this study attempts firstly to make a brief review of the theoretical literature on the relationship that exists between the trade balance and exchange rates. secondly, the main purpose of this study is to compare a group of selected empirical studies on turkish foreign trade and exchange rates, by considering their sample period, data frequency, econometric methods, modelled variables and empirical results. the survey of the empirical studies refers to that the debate about the effects of exchange rates changes on turkey’s trade balance is inconclusive.