01979cas a2200253 a 4500 AALejournalIMF019289 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498312738 1018-5941 BD-DhAAL BD-DhAAL Iossifov, Plamen. Real Effective Exchange Rate and Trade Balance Adjustment : The Case of Turkey / Plamen Iossifov, Xuan Fei. Washington, D.C. : International Monetary Fund, 2019. 1 online resource (38 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students There is an ongoing debate in the literature on whether global trade flows have become disconnected from the large real effective exchange rate movements in the wake of the global financial crisis. The question has important policy implications for the role of exchange rates in supporting growth and restoring external balance. In this paper, we use Turkey---a large and open emerging market economy that has experienced sizable swings of the real effective exchange rate---as a case study to test competing hypotheses. Our results lend support to the finding in existing cross-country studies that the real effective exchange rate remains an important determinant of trade flows. But, its effect is not symmetric in secular periods of appreciation and depreciation and is, oftentimes, dwarfed by the impact on trade flows of the income growth differential between trade partners. Mode of access: Internet Fei, Xuan. IMF Working Papers; Working Paper ; No. 2019/131 Full text available on IMF http://elibrary.imf.org/view/journals/001/2019/131/001.2019.issue-131-en.xml IMF e-Library