The study analyzed how volatile capital flows affect the real exchange rate in Turkey from 1994 to 2013. When capital flows are unstable, the real exchange rate decreases. This means that the value of the country's currency compared to foreign currencies goes down. In simpler terms, when money moves in and out of Turkey quickly, it can cause the country's currency to lose value. This can lead to inflation, an increase in the current deficit, and other economic challenges.