Büyüme, Cari Açık ve Enflasyon İlişkisi: Türkiye Üzerine Bir İnceleme
The Relationship of Growth, Current Deficit and Inflation: A Review on Turkey

Author(s): Serhat Alpağut
Subject(s): National Economy, Economic history, Post-War period (1950 - 1989), Transformation Period (1990 - 2010), Present Times (2010 - today), Financial Markets
Published by: Özgür Yayın Dağıtım Ltd. Şti.
Keywords: Turkey; national economy; economic growth; current account deficit; inflation ;
Summary/Abstract: This research examines the relationship between growth, current account deficit and inflation with the annual data of 1974-2021. In the research, impulse-response and variance decomposition analysis based on VAR (Vector Autoregressive) model was applied. The findings show that economic growth reacts in a short-term (1-2 years) negative and decreasing way in the event of a shock in the current account deficit. In addition, the current account deficit reacts negatively to the economic growth shock. The next important determinant after the forecast error variance in the current account deficit shock is economic growth. Although the current account deficit affects the growth negatively in Turkey, it has been concluded that economic growth brings the current account deficit together. The effects of inflation are statistically insignificant. The results are in line with theory and literature. In this case, growth-oriented foreign trade policies should be implemented meticulously. Considering the fact that Turkey grows with the support of imports, it should be taken into account that every growth has a current account deficit cost.

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