The impact of terrorist attacks on foreign exchange rate: Case study of Turkish lira versus pound sterling

Artikel

In this study, the impact of terrorist attacks on exchange rate is estimated. Particularly, the study focuses on terrorist attacks in Turkey and its implication on Turkish lira versus pound sterling exchange rate. In order to find the causal effect, the study employed Autoregressive distributive lag (ARDL) bound testing approach as an estimation technique. Accordingly, the analysis reveals that a terrorist attack has a negative impact on the exchange rate in both the short-run and long-run. However, the negative effect of terrorism tends to be small in both the short-run and long-run. More precisely, terrorist attacks depreciate the exchange rate between Turkish lira and pound sterling by approximately 0.024% in the next trading day. The long-term effect also shows that a terrorist attack depreciates the exchange rate on average by 0.0706%.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Economies ; ISSN: 2227-7099 ; Volume: 5 ; Year: 2017 ; Issue: 1 ; Pages: 1-8 ; Basel: MDPI

Classification and Topics

• Classification: Wirtschaft ; History of Economic Thought: Quantitative and Mathematical ; Conflict; Conflict Resolution; Alliances; Revolutions ; Foreign Exchange
• Subject: terrorism ; exchange rate ; ARDL ; error correction

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Maitah, Mansoor ; Mustofa, Jehar ; Ugur, Gok
• Event: Veröffentlichung
• (who): MDPI
• (where): Basel
• (when): 2017

Further information

• DOI: doi:10.3390/economies5010005
• Handle: http://hdl.handle.net/10419/167761
• Last update: 10.03.2025, 11:44 AM CET