This study investigates the impact of changes in oil prices on the real economic activity of Turkey. For
this purpose, we employ Nonlinear Autoregressive Distributed Lags (NARDL) model which enables
us to test the short-run and long-run asymmetries concurrently and allows us to measure the
corresponding reaction of economic growth to changes in its regressors. The empirical results confirm
the asymmetric effect of oil price changes on economic growth. Particularly, rises in oil prices have a
negative influence on economic growth in the long run and this impact has a larger magnitude relative
to declines in oil prices which are found to be statistically insignificant. That is to say, the output
growth does not respond to the reductions in oil prices but rises in oil prices.