COMPARATIVE ANALYSIS OF CAUSALITY BETWEEN FOREIGN TRADE POLICIES AND ECONOMIC GROWTH RATES: THE CASE OF TURKEY 1923-1980 AND 1980-2019

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Year-Number: 2020-33
Number of pages: 1912-1925
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Abstract

ABSTRACT The discovery of cause-and-effect relationships in positive science allows us to understand the current situation and make consistent forward-looking predictions. In this way, it becomes easier to keep the areas examined under control and to determine the strategies to be implemented. In this study, the cause-and-effect relationship between trade policy implemented and economic growth in Turkey has been investigated with positivist perspective and analytical approach. In this study, the growth rates of Turkey have been examined in two periods before and after 1980. Thus, the effects of protectionism and free trade practices on economic growth in Turkey have been determined. The first difference of the study from other studies in the literature is that economic growth rates were used instead of GDP as variable. Thus, the existence of negative growth rates during the period examined has not been neglected. Another superior side of the study is that the causality relationship between growth and the two main foreign trade policies for Turkey has been examined comparatively. The importance of the study is that provides opportunity of creating projections going forward by investigating the past period analytically. The findings of empirical analysis conducted with the Granger Causality Test can be summarized as follows: In the pre-1980 period, where introverted growth strategies based on import substitution were monitored, two unidirectional causality relationships were detected, from growth to import and from export to import. In the post-1980 period in which free trade policies were implemented, two unidirectional causality relationships were detected from import to growth and from import to export. Key Words: foreign trade policy, economic growth, causality

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