Türkiye Ekonomisi Temelinde Balassa-Samuelson Hipotezinin Geçerliliği

Abstract

After the collapse of Bretton Woods system in 1973, many countries have adopted floating exchange rate regime, raising concerns over the high volatility in exchange rate behavior. There are many theoretical works in the literature of international finance trying to explain the determinants of exchange rates, one of which is Balassa-Samuelson hypothesis put forward originally by Harrod (1933) and later by Balassa (1964) and Samuelson (1964). According to the hypothesis, the deviation of real exchange rate from its equilibrium level results from the productivity differences between tradable and non-tradable sectors. There is a great deal of studies empirically testing the validity of the hypothesis, with mixed evidence. In this thesis, Balassa-Samuelson hypothesis is examined empirically from the perspectives of Turkish economy, employing bilateral panel data from 25 OECD countries over the periods of 1970-2011.