<abstract xml:lang="en" xmlns="http://www.w3.org/1999/xhtml"><p>This study aims to assess Turkey's position relative to European countries with respect to the optimum currency areas (OCA) criteria, taking Germany as the center country and employing Mahalanobis distance as a similarity measure. To this end, we followed a novel approach in the application of Hodrick-Prescott and Baxter-King filters to the industrial production series and the real interest rates under three cases. We then computed OCA similarity indices, calculated countries' similarities with respect to Germany and their nearest neighbors, and compared the results. Our results show that Turkey is the second furthest neighbor country to Germany after Croatia in the first two cases. However, Turkey is the third furthest country to Germany after Norway and Romania in the third case</p></abstract>

This study aims to assess Turkey's position relative to European countries with respect to the optimum currency areas (OCA) criteria, taking Germany as the center country and employing Mahalanobis distance as a similarity measure. To this end, we followed a novel approach in the application of Hodrick-Prescott and Baxter-King filters to the industrial production series and the real interest rates under three cases. We then computed OCA similarity indices, calculated countries' similarities with respect to Germany and their nearest neighbors, and compared the results. Our results show that Turkey is the second furthest neighbor country to Germany after Croatia in the first two cases. However, Turkey is the third furthest country to Germany after Norway and Romania in the third case

Optimum Currency Areas Theory: An Empirical Application to Turkey

Research Asistant Department of International Relations, Hacettepe University, Faculty of Economics and Administrative Sciences, Beytepe, 06800, Ankara, Turkey

Department of Economics, Hacettepe University, Faculty of Economics and Administrative Sciences, Beytepe, 06800, Ankara, Turkey

Department of International Relations, Hacettepe University, Faculty of Economics and Administrative Sciences, Beytepe, 06800, Ankara, Turkey

South East European Journal of Economics and Business

{"article-title":"Optimum Currency Areas Theory: An Empirical Application to Turkey"}

This study aims to assess Turkey's position relative to European countries with respect to the optimum currency areas (OCA) criteria, taking Germany as the...

Optimum Currency Areas Theory: An Empirical Application to Turkey

Published Online: Mar 04, 2008

Page range: 75 - 88

DOI: https://doi.org/10.2478/v10033-007-0008-y

Keywords
Optimum Currency Areas Theory, Turkey, Rate

This content is open access.

Optimum Currency Areas Theory: An Empirical Application to Turkey

Published Online: Mar 04, 2008

Page range: 75 - 88

DOI: https://doi.org/10.2478/v10033-007-0008-y

KeywordsOptimum Currency Areas Theory, Turkey, Rate

This content is open access.

Keywords
Optimum Currency Areas Theory, Turkey, Rate