@article{2016,title={THE RELATIONSHIP BETWEEN REAL EXCHANGE RATE AND IMPORT IN TURKEY: EMPIRICAL ANALYSIS ON CONSUMPTION AND INVESTMENT},abstractNode={Relationship between balance of foreign trade and real exchange rate, in other words, reaction of balance of foreign trade towards real exchange rate is a leading and effective factor in each outward-oriented economy. Real exchange rate movements have a determinative effect on the balance of foreign trade as a result of production and trade structure especially in developing economies. Real exchange rate movements have also serious effects on the balance of foreign trade in Turkish economy, as a developing country, as a result of its structure which can carry out importation-oriented production and trade. In this regard, it is necessary to touch upon the effect of exchange rates and exchange rate policies as a factor which determines international competitive capacity of the country. In the study, the interaction between investment and consumption has empirically been analyzed in terms of exchange rates and the importation of investment goods and consumption goods in Turkish economy for 2003:01-2015:10 period. Granger Causality analysis, action-reaction analysis and variance decomposition methods have been used in the study and a causality relationship has been realized between a change in exchange rates and importation of investment goods and consumption goods as a result of econometric analyses. Changes in exchange rates affect the production and exportation units of Turkish economy in terms of a cost factor. In conclusion, it has been concluded that exchange rates are effective in the importation of investment goods and consumption goods. In this regard, it is also understood that real exchange rates affect the importation of capital goods and consumption goods which is in causality relation with exchange rates. In this regard, rate movements have a serious effect on importation and it is notable that especially changes in the importation of consumption goods highly arise out of the changes in the importation of capital goods.},author={Zehra DOĞAN-- Ünzüle KURT},year={2016},journal={The Journal of Academic Social Science Studies}}