THE TWIN DEFICIT HYPOTHESIS: THEORETICAL AND EMPIRICAL EXAMINATION IN TURKEY
İKİZ AÇIK HİPOTEZİ: TÜRKİYE’DE TEORİK VE AMPİRİK İNCELEME

Author : İsmail TAŞ -- Eda DİNERİ - İsmail TAŞ
Number of pages : 372-390

Abstract

This study aims to investigate relationship between the budget balance and the current account balance in Turkey for the period 1980 between 2015 by using annual data. Johansen Co integration Test and Granger causality test based on VEC are used to determine the direction of the relationship between the current account deficit, budget deficit and per capita income. Results of analysis show that there is interaction between economic growth and current account deficit. Unidirectional causality from current account deficit to budget deficit is found.

Keywords

Twin deficit, Budget Balance, Current account balance, economic growth

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