| Summary: | Turkish automotive market, has made a big improvement as of 1960's. Automotive production and exports increased rapidly due to transition to a free market economy in the 1980s, and the customs union with the EU in 1996. However, Turkish automotive industry experienced supply fluctuations because of cyclical macro-economic crisis. The aim of this study, is to analyze the effects of shocks in macro-economic variables in Turkey for the period of 1963-2012 on the automotive supply. As a method of econometric analysis “Vector Autoregressive Model (VAR)” is used. According to the results obtained from the VAR model, the response of economic growth rate shocks to the automobile supply is significant, only for the first and a half years. In contrast, it has been determined that the effect of exchange rate shocks on automotive supply was quite
influential.
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