Using the NARDL Model to Examine the Relationship between Oil Prices and Economic Growth: The Case of Turkey

Authors : Melike Torun

Pages : 1-9

View : 295 | Download : 307

Publication Date : 2023-12-30

Article Type : Research

Abstract :Crude oil is one of the main raw resources used to produce commodities today; therefore, changes in the price of this essential resource are reflected as input costs in the final costs of the products. The impact of fluctuating crude oil prices on economic growth, particularly in recent years, is significant. Actually, fluctuations in the price of oil can have an impact on both the global economy\'s structure and the economy of Turkey. Given the significance of either rising or falling oil prices to the global economy, the aim of this paper is to investigate and determine the co-integration relationship between oil prices and economic growth in the Turkish economy. The nonlinear ARDL (NARDL) model was employed in order to evaluate the long-term integration of the Turkish economy throughout the years 1976–2021. The findings demonstrate that Turkey’s GDP is asymmetrically affected by both positive and negative shocks to crude oil prices. This research’s conclusions are essential for counseling academics, professionals, and policymakers. It is recommended that Turkey reevaluate its policies in this area and make any necessary modifications in light of a deeper understanding of the role that crude oil prices play in a process of stable economic growth both inside the country and outside the world.
Keywords : Petrol fiyatları, Ekonomik büyüme, NARDL modeli, Türkiye