Macroeconomic variables and oil price: evidence from Turkey

The focus of the paper is on the relationship between oil price and macroeconomic variables in the context of Turkey’s economy. Macroeconomic variables used in this research are Gross Domestic Product (GDP), Consumer Price Index (CPI), Crude Oil (CROIL), FOREX and Foreign Reserves (FR). The standard time series techniques are applied for the analysis. Our findings based on the above techniques tend to suggest that the FOREX (USD/TL) is the most leading variable followed by GDP and oil price. and does have a significant impact on Turkey’s economy. It appears that the oil price follows the exchange rate in that when the American dollar appreciates, the oil price in local currency would go up as the oil price is denominated in US$