Using a classical gravity model, this paper examines the effects of geopolitical risks on the trade flows, among 164 developing and developed countries, for the period of 1985-2013. For this purpose, we use the new index of geopolitical risks (GPR index). To the best of our knowledge, this is the first paper in the literature that considers the new GPR index in a gravity model. The paper implements the fixedeffects (FE), the random-effects (RE), the Hausman-Taylor (HT), and the Poisson Pseudo-maximum Likelihood estimations. The findings indicate that geopolitical risks negatively affect the trade flows. The paper also discusses the potential policy implications.

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235After the collapse of the Brettonwood system in 1973, most of the countries have abandoned to use solely the fixed exchange rate regime, and different countries have adapted different exchange rate regimes. Then, the impact of both the exchange rate level and the exchange rate volatility or variability especially on exports, the bilateral trade flows and the volumes of trade have been empirically and theoretically discussed.A large number of studies examine both the effect of the exchange rate and its volatility on agricultural trade. However, no consensus was reached yet on the relationship between the exchange rate and agricultural trade. As discussed in the literature, it is important to use disaggregated data and/or data on the individual commodities to get more meaningful results on the size and magnitude of the effects of the real exchange rates on agricultural commodities trade. (Awokuse and Yuan 2006;Byrne et al. 2008;Bahmani-Oskooee and Hegerty 2009;Karemera et al. 2011). Byrne et al. (2008) discuss the possibility of finding a negative effect of the exchange rate volatility on trade by pooling the data of all industries together, and claim that the disaggregation of the data such as firm, industry or commodity level could provide more appropriate and meaningful results. Considering the individual sectors and/or commodities is vitally important to understand the exact nature of the relation and to further tailor effective policy measures based on these fine results. Thus, we investigate the relationship between the real exchange rates and several of the most important Turkish agricultural commodities. They represent almost a quarter of the overall Turkish agricultural exports. LITERATURE REVIEWA number of studies ( Hooper and Kohlhagen 1978;Arize et al. 2008;Kafle and Kennedy 2012) argue that the exchange rate volatility can have a negative effect on the international trade flows, either directly through the uncertainty and adjustment costs or indirectly through its effect on the allocation of resources and government policies. The volatile nature of exchange rates has always led risk-averse traders to reduce their trading activities ultimately reducing the international trade flows. However, Arize et al. Abstract: Th is study investigates the eff ect of the exchange rate volatility and the real exchange rate on the bilateral agricultural exports fl ows of Turkey to 46 countries. A panel data set, which contains 46 cross-sections and 1840 observations, is used for exports of the selected agricultural commodities to countries from 1971 to 2010. Our empirical results based on a gravity equation show that while the exchange rate volatility does not exert a signifi cant eff ect on the Turkish agricultural commodity exports, the real exchange rate has a statistically signifi cant eff ect on the agricultural commodity export fl ows. Regardless of the region chosen, raisins and tobacco exports are very much sensitive to the real exchange rates. It means that any depreciation in the Turkish Lira leads to hig...