Interactions between Energy Consumption and Imports: Empirical Evidence from Turkey

ABSTRACT

The present study investigates interactions between imports and energy consumption in the case of Turkey, which heavily depends on enervngy imports over the years. Empirical results reveal that energy consumption exerts significant effects on imports both in the long-term and short-term periods. Results from causality, impulse responses, and variance decompositions do also show that energy consumption exerts significant effects on real income and real exchange rates in Turkey. The major findings of this study reveal that alternative local energy sources and renewable energy sources are needed in order to reduce foreign import dependency and current account deficits in Turkey.

KEYWORDS:

• Energy consumption
• imports
• multiple structural breaks
• ARDL
• Turkey

JEL CODES:

• C22
• C51
• F14
• F18