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Sustainability Of The Current Account Defict In Turkish Economy: A Periodic Time Series Analysis With Structural Breaks (1984q1-2017q4)

Author

Listed:
  • Ömer YALÇINKAYA

    (Ağrı İbrahim Çeçen University)

  • Muhammet DAÅžTAN

    (Ağrı İbrahim Çeçen University)

  • Kerem KARABULUT

    (Ağrı İbrahim Çeçen University)

Abstract

In this study, it is aimed to investigate the sustainabilityof the currentaccount deficit level in Turkisheconomy, where the process of financially international expansion hasaccelerateduntil the 1980’s, under the inter-periodmodel developed by Husted (1992). In line with this purpose, sustainability level of the current account deficit in Turkish economy is examined periodically in a comparativeperspective by using time series analysis methodology with structural breaks for the periods 1984:Q1-2001:Q4, 2002:Q1-2017:Q4, and 1984:Q1-2017:Q4. As a result of the study, it is determined that the current accountdeficit in Turkish economy is strongly sustainable in the period 1984:Q1-2001:Q4while it is unsustainable or weakly sustainable in the periods 2017: Q4and 1984:Q1-2017:Q4. It is also determined that the unsustainability of the current account deficit is at its highest level or the sustainability of the current account deficit in a weak form is at its lowest level in the period 2002:Q1-2017:Q4. These results indicate a necessity of the development and the treatment of monetary and fiscal policy measures to remove the deficit between export revenues and import expendituresand reduce the current account deficit.

Suggested Citation

  • Ömer YALÇINKAYA & Muhammet DAÅžTAN & Kerem KARABULUT, 2018. "Sustainability Of The Current Account Defict In Turkish Economy: A Periodic Time Series Analysis With Structural Breaks (1984q1-2017q4)," JOURNAL OF LIFE ECONOMICS, Holistence Publications, vol. 5(4), pages 1-22, October.
    • Handle: RePEc:jle:journl:v:5:y:2018:i:4:p:1-22
    DOI: 10.15637/jlecon.258
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    Keywords

    Sustainability of the Current Account Deficit; Inter-Period Budget Constraint Model; Turkish Economy; Time Series Analysis with Structural Breaks.;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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