A SURVEY ON THE FACTORS AFFECTING CURRENT ACCOUNT BALANCE OF TURKEY: EVIDENCE FROM ARDL-BOUNDS TESTING APPROACH

Gökhan Özdamar ()
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Gökhan Özdamar: Süleyman Demirel University

No 3506081, Proceedings of International Academic Conferences from International Institute of Social and Economic Sciences

Abstract: Main objective of this study is to analyze the relationships between the current account balance and selected major macroeconomic variables in Turkish economy. In this respect ARDL-Bounds testing approach is applied. Results of the study related to the long-run show that the international terms of trade is a strong explanatory variable of the current account balance of Turkey. This result implies that Harberger-Laursen-Metzler (HLM) hypothesis is valid for Turkey. Findings reveal that also foreign trade balance has a strong effect on the current account balance of Turkey while the gross domestic product is found to be statistically significant but the effect level is quite low. Domestic interest rate and the real effective exchange rate variables are found to be statistically insignificant in the long-run. Error correction model results for the short-run reveal that current account balance of Turkey is mostly affected from the lagged value of itself, from foreign trade balance and also from the lagged value of real effective exchange rate.

Keywords: Current Account Balance; Turkey; ARDL-Bounds testing (search for similar items in EconPapers)
JEL-codes: F32 F40 F41 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2016-04
New Economics Papers: this item is included in nep-acc, nep-ara, nep-cwa and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in Proceedings of the Proceedings of the 22nd International Academic Conference, Lisbon, Apr 2016, pages 194-204

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Persistent link: https://EconPapers.repec.org/RePEc:sek:iacpro:3506081

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