DETERMINANTS OF THE CURRENT ACCOUNT BALANCE IN TURKEY: AN ARDL APPROACH


Insel A., Kayıkçı F.

ECONOMIC RESEARCH-EKONOMSKA ISTRAZIVANJA, vol.26, pp.1-16, 2013 (Journal Indexed in SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 26
  • Publication Date: 2013
  • Title of Journal : ECONOMIC RESEARCH-EKONOMSKA ISTRAZIVANJA
  • Page Numbers: pp.1-16

Abstract

The objective of this paper is to examine the theoretical and empirical linkage between current account deficits and a broad set of macroeconomic variables in Turkey. This paper employs the Auto Regressive Distributed Lag (ARDL) model to specify the determinants of the current account in Turkey between 1987 and 2009. Results indicate that inflation affects the current account balance positively, whereas growth, openness, oil prices, and appreciation of the real exchange rate cause the current account balance to deteriorate.After any shock, it takes four quarters for the current account balance to return to its long-run equilibrium level.