WORLD OIL PRICES AND AGRICULTURAL COMMODITY PRICES IN TURKEY: EVIDENCE FROM SYMMETRIC AND ASYMMETRIC CAUSALITY TESTS

This paper looks for empirical support of the validity of the causal relationship between world crude oil prices and agricultural commodity prices in Turkey over the period 1994:01-2010:12 by applying the symmetric causality test of Hacker and Hatemi (2006) and also a recently introduced causality test of Hatemi-J’s (2012), which allows for asymmetry. We determine that world oil prices Granger-cause the price of maize by employing the symmetric causality test. However, the results of the asymmetric causality test show that the positive and negative cumulative shocks in oil prices Granger-cause the positive and negative cumulative shocks of cotton prices.