Examination Of The Nonlinear Relationship Between, Exchange Rate, Oil Prices and the Food Prıces in Turkey: Time-Varying Parameter VAR (TVP-VAR) Models

Güngör, Selim; Erer, Deniz

doi:10.29023/alanyaakademik.1082332

Cited by 5 publications

(4 citation statements)

References 44 publications

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“…The findings reveal that positive changes in the long-term trend of oil prices and the exchange rate have a greater impact on food prices than negative changes. The same relationship was also analyzed by Gungor and Erer [87]. The paper finds that the real exchange rate effect on food inflation increased during the COVID-19 pandemic period.…”

Section: Literature On Türkiyesupporting

confidence: 53%

Unraveling the Major Determinants behind Price Changes in Four Selected Representative Agricultural Products

Tandogan Aktepe,

Kayral

2024

Agriculture

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This study aims to analyze the drivers behind price changes in agricultural products in Türkiye from 2002 to 2021, considering the impacts of three crises of different causes which are the global food crisis, the Russia–Türkiye aircraft crisis, and the COVID-19 pandemic. The potential factors are categorized into four subgroups: governmental effects, agricultural inputs, macroeconomic indicators, and climatic conditions. The selected agricultural goods for price change measurement include wheat and maize representing subsistence goods, and olive oil and cotton as marketing goods. The autoregressive distributed lag (ARDL) model is applied to observe both the short- and long-term impacts of the variables on price developments. The results suggest that government effectiveness, regulatory quality, nitrogen use, water price, money supply, exchange rate, and GDP under the related categories are the most effective factors in price changes. Among the variables under the category of climatic conditions, significant values are obtained only in the analysis of the temperature impact on olive oil. The analysis also reveals the variable impact of crises on the prices of the chosen products, depending on the goods involved. The maize and wheat analyses yield particularly noteworthy results. In the long run, nitrogen use demonstrates a substantial positive impact, registering at 29% for wheat and 19.47% for maize, respectively. Conversely, GDP exhibits a significant negative impact, with 26.15% and 20.08%. Short-term observations reveal that a unit increase in the governmental effect leads to a reduction in inflation for these products by 17.01% and 21.42%. However, changes in regulatory quality result in an increase in inflation by 25.45% and 20.77% for these products, respectively.

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Section: Literature On Türkiyesupporting

confidence: 53%

Unraveling the Major Determinants behind Price Changes in Four Selected Representative Agricultural Products

Tandogan Aktepe,

Kayral

2024

Agriculture

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“…In studies conducted in the sample of Türkiye (Altıntaş (2016), Çınar & Hushmat (2016), Utkulu & Ekinci (2016), Damba, Bilgiç & Aksoy (2017), Alper (2018), Karadaş & Koşaroğlu (2020), Akçağlayan (2021), Algan et al (2021), Gökçe (2021), Güngör & Erer (2022)) there is a positive relationship between oil prices and food prices. Unlike both theoretical expectations and empirical literature, there is an inverse relationship to expectations in the current study.…”

Section: Discussionmentioning

confidence: 99%

“…We reviewed 30 studies in the literature. From these studies (Altıntaş, 2016;Çınar & Hushmat 2016;Utkulu & Ekinci 2016, Damba et al, 2017Alper, 2018;Karadaş & Koşaroğlu, 2020;Akçağlayan, 2021;Algan et al, 2021;Gökçe, 2021;Güngör & Erer, 2022) for Türkiye. Other studies are in the global arena (Chen et al, 2010;Zhang et al, 2010;Esmaeili & Shokoohi, 2011;Reboredo, 2012;Jebabli et al, 2014;Obadi & Korcek, 2014;Abdlaziz et al, 2016;Lucotte, 2016;Nwoko et al, 2016;Meyer et al, 2018;Pal & Mitra, 2018;Alieva, 2019;Cheng & Cao, 2019;Zmami & Ben-Salha, 2019;Chen al., 2020;Roman et al, 2020;Sarwar et al, 2020;Taher, 2020;Karakotsios, 2021;Olayungbo, 2021).…”

Section: Literature Reviewmentioning

confidence: 99%

“…In these studies, many different methods were used in ARDL (Chen et al, 2010;Meyer et al, 2018;Zmami & Ben-Salha, 2019;Karakotsios et al, 2021); NARDL (Abdlaziz et al, 2016;Altıntaş, 2016;Utkulu & Ekinci, 2016;Sarwar et al, 2020;Olayungbo, 2021;Akçağlayan, 2021;Algan et al, 2021;Gökçe, 2021); Cointegration and/or causality analysis (Zhang et al, 2010;Esmaeili & Shokoohi, 2011;Obadi & Korcek, 2014;Nwoko et al, 2016;Cheng & Cao, 2019;Roman et al, 2020;Karadaş & Koşaroğlu, 2020;Chen et al, 2020); GARCH (Reboredo, 2012;Çınar & Hushmat, 2016;Damba et al, 2017); VAR (Jebabli et al, 2014;Lucotte, 2016;Alper, 2018;Taher, 2020;Güngör & Erer, 2022) were used.…”

Section: Literature Reviewmentioning

confidence: 99%

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Do Oil Prices Have an Effects on Food Prices Fresh Evidences from Türkiye

DEMİRTAŞ¹,

Soyu²,

Dur³

2023

isarder

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Purpose –The purpose of this study is to investigate the relationships between oil prices and food prices for January 2003-September 2022 in Türkiye.Design/methodology/approach–Variable associations were examined using the RALS cointegration test. The RALS-ADL cointegration test uses information in non-dispersed errors. Thus, it produces more powerful predictions for non-normal distributions compared to cointegration tests. In addition,this test avoids widespread practices such as predetermining a particular functional form.Findings –The results show that the series have a cointegration connection. The DOLS, FMOLS, and Canonic cointegration approaches produced long-term coefficients in agreement with the discovery of a long-term association. Although the results of the applied tests were comparable, the results of the FMOLS and Canonik tests are substantially more comparable. Given that FMOLS technique is more effective than others and produces outcomes comparable to those of Canonik approach, its results have been interpreted in this situation. As a result, while having a positive sign, the exchange rate variable is not statistically significant. In terms of food prices, oil prices have a negative explanatory power. The CPI variable has a considerable impacts on both the present and future pricing of food. Our findings demonstrate that the price of oil does not always correlate with the price of food, and vice versa.Discussion –There are certain recommendations that can be made to researchers and policymakers based on the findings. Supporting contract farming, which has recently been mentioned, will improve food sufficiency and the balance of food stocks, particularly during times of crisis. On the demand side, the preference for locally produced foods can reduce the over-reliance on food imports, which frequently worsens the country's status with regard to food prices and may lower the dryness. From this vantage point, future research can contrast oil-exporting nations and oil-importing countries in terms of the food price-oil price connection, whereas the current study focuses on the relationships between oil prices and food prices in Türkiye.

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Does the Exchange Rate Have a Pass-Through Effect on Domestic Food Prices in Türkiye? An Empirical Study Using a Combined ANN Algorithm and VAR Method

Çam

2024

GAUN-JSS

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Exchange rate fluctuations have far-reaching consequences for national economies, companies and, above all, consumers. It is therefore important to understand the mechanisms by which these fluctuations affect food prices in domestic markets. In this context, we examine the complex relationship between exchange rates and domestic food prices and attempt to calculate the pass-through effect of the exchange rate on domestic prices. To examine the pass-through effect of the exchange rate on food prices, we use monthly USD/TRY exchange rate data from January 2003 to July 2023 as well as the global food price index, the export-import rate for food and the producer price index for food in Türkiye. We employ the vector autoregression (VAR) method to determine the optimal lags of the variables included in the analysis and the artificial neural network (ANN) algorithm to calculate the overall pass-through effect of the USD/TRY exchange rate on domestic food prices. The results show that the pass-through effect of the variable on food prices persists for three months: the current month, the previous month and the two previous months. The total pass-through effect of the exchange rate on food prices reaches up to 27%. Half of this impact comes from the previous month's food prices. In addition, the ratio of food exports to imports accounts for about 12% of the increase in domestic food prices. The results also show that the variable with the highest pass-through effect is the producer price index and that 90% of the increase in food prices is due to domestic dynamics, while the effect of price increases in foreign markets is only about 10%.

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Examination Of The Nonlinear Relationship Between, Exchange Rate, Oil Prices and the Food Prıces in Turkey: Time-Varying Parameter VAR (TVP-VAR) Models

Cited by 5 publications

References 44 publications

Unraveling the Major Determinants behind Price Changes in Four Selected Representative Agricultural Products

Unraveling the Major Determinants behind Price Changes in Four Selected Representative Agricultural Products

Do Oil Prices Have an Effects on Food Prices Fresh Evidences from Türkiye

Does the Exchange Rate Have a Pass-Through Effect on Domestic Food Prices in Türkiye? An Empirical Study Using a Combined ANN Algorithm and VAR Method

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