Main Article Content


If we talk about the importance of variables in economic development, income distribution is not the second to economic growth, especially in emerging countries. These emerging countries are generally characterized by the volatility of exchange rates, especially after most of the countries adopted floating exchange rates system. This paper investigates the impact of an increases in dollar value on income distribution using annual data in the period 1990-2016 for Turkey via an ARDL model and bound testing analysis. In constructing the empirical model, it also considers the impact of GDP per capita on the dependent variable. Findings/Originality: The paper finds that an increase in dollar value leads to a more unequal income distribution in Turkey. The dollar holds an important place in Turkey’s foreign trade. Therefore, the changes in the value of dollar results in significant welfare effects


Exchange rate Gini coefficient Bound testing analysis.

Article Details

How to Cite
Güzel, A. E., & Arslan, Ünal. (2019). On the nexus between exchange rate and income distribution in Turkey: ARDL bound testing analysis. Economic Journal of Emerging Markets, 11(1), 1–7.


  1. Agénor, P. R. (2002). Macroeconomic adjustment and the poor: Analytical issues and cross-country evidence, Policy Research Working Paper Series No. 2788.
  2. Alexander, S. S. (1952). Effects of a devaluation on a trade balance. Staff Papers, 2(2), 263–278.
  3. Bahmani-Oskooee, M. (1997). Effects of devaluation on income distribution. Applied Economics Letters, 4(5), 321–323.
  4. Bahmani-Oskooee, M., Goswami, G. G., & Mebratu, S. (2006). Black market premium and income distribution. The Journal of Developing Areas, 39(2), 17–28.
  5. Bahmani-Oskooee, M., & Motavallizadeh-Ardakani, A. (2017). On the value of the dollar and income inequality: Asymmetric evidence from state level data in the US. Journal of Economic Asymmetries, 16(C), 64–78.
  6. Bahmani-Oskooee, M., & Motavallizadeh-Ardakani, A. (2018). Exchange rate changes and income distribution in 41 countries: Asymmetry analysis. , 68, . Quarterly Review of Economics and Finance, 68(C), 266–282.
  7. Engle, R. F., & Granger, C. W. (1987). Co-integration and error correction: Representation, estimation, and testing. Econometrica: Journal of the Econometric Society, 55(2), 251–276.
  8. Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration—with applications to the demand for money. Oxford Bulletin of Economics and Statistics, 52(2), 169–210.
  9. Kwiatkowski, D., Phillips, P. C., Schmidt, P., & Shin, Y. (1992). Testing the null hypothesis of stationarity against the alternative of a unit root: How sure are we that economic time series have a unit root?. , 54(1-3), 159-178. Journal of Econometrics, 54(1–3), 159–178.
  10. Lim, M. H. (2014). Globalization, export-led growth and inequality: The East Asian story. (South Centre Research Paper No. 57). Geneva.
  11. Mishkin, F. S. (2000). Inflation targeting in emerging-market countries. American Economic Review, 90(2), 105–109.
  12. Pesaran, M. H., & Shin, Y. (1998). An autoregressive distributed-lag modelling approach to cointegration analysis. Econometric Society Monographs, 31, 371–413.
  13. Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16(3), 289–326.
  14. Shahbaz, M., Islam, F., & Butt, M. S. (2011). Devaluation and income inequality: Evidence from Pakistan (MPRA Paper No. 35522). Retrieved from
  15. Shin, Y., & Schmidt, P. (1992). The KPSS stationarity test as a unit root test. Economics Letters, 38(4), 387–392.
  16. Solt, F. (2016). The standardized world income inequality database. Social Science Quarterly, 97(5), 1267–1281.
  17. Turkish Statistical Institute. (2018). Turkey Trade Balance. Retrieved from
  18. World Bank. (2017). World development Indicators: GDP per capita (constant 2010 US$). Retrieved June 15, 2018, from