Asymmetric Examination of Exchange Rate Dynamics: Are There Any Divergent Effects on Agricultural Growth

This study aims to investigate the asymmetric effects of exchange rates on the growth of the agricultural, industrial, and service sectors in Türkiye, utilizing the Nonlinear Autoregressive Distributed Lag (NARDL) method for time series analysis. The analysis covers the period from 2005Q4 to 2023Q4. The results indicate significant differences in sectoral effects. Specifically, increases in exchange rates do not have a substantial long-term impact on the agricultural sector, while decreases in exchange rates tend to enhance agricultural output over the long term. In contrast, for the industrial and service sectors, increases in exchange rates result in a decline in production, whereas decreases in exchange rates lead to an increase in production. The findings also reveal that the service sector is the most affected by exchange rate fluctuations in Türkiye, as indicated by the coefficients. These results demonstrate that Türkiye, as an emerging market and developing country, experiences the impacts of exchange rate fluctuations on its agricultural sector differently than on its industrial and service sectors in the long term. The NARDL findings underscore the necessity for regulatory institutions to manage exchange rates more sensitively, taking into account the relative importance of each sector in the Turkish economy.

JEL Codes: F31, O24, Q17.