VECTOR AUTOREGRESSION APPROACH TO THE RELATIONS AMONG CURRENT ACCOUNT, REAL EXCHANGE RATE AND GROWTH IN TURKEY

?brahim Bak?rta? () and Süleyman Koç
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?brahim Bak?rta?: Aksaray University

No 2504064, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

Abstract: Current account deficit (CAD) is particularly the main vulnerability of Turkish economy in the post 2001 crises period. High level of CAD/GDP ratio was a crisis indicator for Turkish economy but this remarkable indicator can not cause any crisis despite of 5 percent period mean value in the post 2001 crisis era. In this study we try to determine dynamic relationship among CAD, real effective exhange rate (REER) and economic growth in Turkey by using Vector Autoregression (VAR) method in the 2003Q1-2014Q3 period. Based on the estimated VAR model, impulse-response functions and forecast error variance decompositions shows that current account deficit (CAD) is a strong determiner of economic growth in Turkey. We also found that CAD and REER are granger cause of economic growth in Turkish economy.

Keywords: Current Account Deficit; Vector Autoregression; Growth; Real Exchange Rate; Turkish economy. (search for similar items in EconPapers)
JEL-codes: C32 F31 F32 (search for similar items in EconPapers)
Pages: 1 page
Date: 2015-06
New Economics Papers: this item is included in nep-acc, nep-ara and nep-cwa
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Published in Proceedings of the Proceedings of the 16th International Academic Conference, Amsterdam, Jun 2015, pages 80-80

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iacpro:2504064

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