Optimal Money Area for Turkey: The Case of The Black Sea Economic Coorperation Organization (BSEC)

The Optimal Currency Area (OCA) theory, which was suggested by R. Mundell in 1961, caused countries to participate in different economic mergers and to seek OPA as a result of increasing international commercial competition in the past-1980 period. İn this context, on analysis of whether the Black Sea Economic Cooperation Organization (BSEC), which Turkey is in, is an OPA or not, has been made in order to see whether Turkey can be in an OPA and what the consequences may be. In this study, Real Gross Domestic Product and CPI data between 1991-2019 were analyzed with the help of Structural Autoregressive Model (SVAR). The Ukraine and Armenia series were excluded from the analysis because they were not cointegrated. According to the result of analysis, a correlation was determined between the countries in the union except for Greece, Bulgarian and Romania in terms of the effects of supply and demand shoocks on output and inflation. In addition, it has been determined that Turkey, Georgia and Albania form a core grup within the union.