Yazıcı, MehmetIslam, M. Qamarul2016-08-092016-08-092011Yazıcı, M., Islam, M.Q. (2011). Impact of exchange rate and customs uinon on trade balance at commodity level of Turkey with EU (15). Ekonomska Istrazivanja-Economic Research, 24(3), 75-85.1331-677Xhttp://hdl.handle.net/20.500.12416/1201This paper investigates the short-run and long-run impact of exchange rate and customs union on the trade balance at commodity-group level of Turkey with EU (15). Bounds testing approach is employed where a new strategy in the model selection phase is odopted ensuring that optimal model is selected from those models satisfying both diagnostics and cointegration. Results indicate that in the short-run exchange rate matters in determination of trade balance of 13 commodity groups out of 21 and customs union in 8 cases. Pattern of response of trade balance to exchange rate does not suggest a J-curve effect in any of cases. As for the long-run effect, neither exchange rate nor customs union has a statistically significant effect on trade balance of any of commodity groups, suggesting that those significant short-run effects don't last into long-runeninfo:eu-repo/semantics/closedAccessJ-CurveCustoms UnionBounds Testing ApproachExchange RateTrade BalanceArticle2437585