SUSTAINABILITY OF THE CURRENT ACCOUNT DEFICT IN TURKISH ECONOMY: A PERIODIC TIME SERIES ANALYSIS WITH STRUCTURAL BREAKS (1984Q1-2017Q4)

Ömer Yalã‡inkaya (), Muhammet DAÅžTAN () and Kerem Karabulut ()
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Ömer Yalã‡inkaya: AÄŸrı Ä°brahim Çeçen University
Muhammet DAŞTAN: Ağrı İbrahim Çeçen University
Kerem Karabulut: Ağrı İbrahim Çeçen University

JOURNAL OF LIFE ECONOMICS, 2018, vol. 5, issue 4, 1-22

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.

Keywords: Sustainability of the Current Account Deficit; Inter-Period Budget Constraint Model; Turkish Economy; Time Series Analysis with Structural Breaks. (search for similar items in EconPapers)
JEL-codes: C13 E44 F32 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:jle:journl:v:5:y:2018:i:4:p:1-22

DOI: 10.15637/jlecon.258

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