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Foreign Trade Deficit Sustainability of Turkey

  • Burak Güris
  • Burcu Kiran
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    This paper examines whether the foreign trade deficit of Turkey is sustainable or not by using three-regime threshold autoregressive unit root test of Kapetanious and Shin (2006). Three models are estimated including linear OLS, two-regime self-exciting threshold autoregressive and three-regime self-exciting threshold autoregressive models. The three-regime threshold autoregressive model is chosen as appropriate model for foreign trade deficit of Turkey by employing sup-Wald test. The finding results of the three-regime threshold autoregressive unit root test indicate that Turkey’s foreign trade deficit is not sustainable.

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    Article provided by Bulgarian Academy of Sciences - Economic Research Institute in its journal Economic Studies.

    Volume (Year): (2011)
    Issue (Month): 1 ()
    Pages: 167-174

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    Handle: RePEc:bas:econst:y:2011:i:1:p:167-174
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