A Survey on the Factors Affecting Current Account Balance of Turkey: Evidence From Ardl-Bounds Testing Approach

Abstract

It is observed that the ratio of current account deficit-to-gross domestic product is considerably high in Turkish economy, especially in recent years. In this context, investigating the determinants of current account balance becomes important in terms of macroeconomic balance and economic policy decisions. In this study, relationships between the current account balance and selected macroeconomic variables in Turkish economy are researched with the ARDL-Bounds testing approach. 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 and this result implies that Harberger-Laursen-Metzler (HLM) hypothesis is valid for Turkey. Findings indicate that also foreign trade balance has 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. On the other hand, results of the short-run analysis reveal that current account balance of Turkey is mostly affected from the lagged value of itself, from foreign trade balance and also from lagged value of the real effective exchange rate.

The Impact of Macroeconomic Factors on Current Account Deficit in ASEAN Countries

“…The interest rate shows a significant relationship at 0.01 confidence level. The finding however is inconsistent with previous studies such as Ozdamar (2016) and Hassan (2019). Higher costs will lead to a lack of suppliers in the nation and tend to encourage ASEAN consumers to find suppliers from overseas, increasing imports and reducing the current account.…”

“…Therefore, higher exports indicate that a country enjoys a current account surplus. The finding is in parallel with Ozdamar (2016), Sahoor et al (2022) and Sumiyati (2022). Higher term of trade will lead to higher consumption due to lower prices of imported goods or services.…”

“…These countries include Malaysia, Indonesia, Vietnam, Philippines, Cambodia, Myanmar, Singapore, and Laos. Following the model by Sadiku et al (2015), Ozdamar (2016), Destaings (2017), Sahoor et al (2022) and Sumiyati (2022), this study delves into the macroeconomic factors influence the current account (CA). Therefore, the estimation model has been formulated as follows: CA𝑖𝑡 = αₒ + β₁ER 𝑖, + β₂MS 𝑖,𝑡 + β₃TOT 𝑖,𝑡 + β₄OILP 𝑖,𝑡 + β₅IR 𝑖,𝑡 + Ԑ…”

“…A negative relationship is found and revealed that improvement in terms of trade means that export price is higher, leading to a decline in real income and export revenue which tends to deteriorate the current account due to lower savings. However, Ozdamar (2016), Sahoor et al (2022) and Sumiyati (2022) have found a positive relationship between the term of trade (TOT) and the current account. Higher terms of trade will lead to higher consumption due to lower prices of imported goods or services.…”

Logit-Probit Modeli Yardımıyla Türkiye’de Cari Açık Kaynaklı Kriz Riskini Etkileyen Faktörlerin Belirlenmesi

“…Cari işlemler açığını, yurtiçi tasarruflar ve yurtiçi yatırımlar arasındaki fark ile açıklayan araştırmacılar da bulunmaktadır (Milesi-Ferretti ve Razin, 1996;Apergis, Katrakilis ve Tabakis, 2000;Baharumshah, Lau ve Fountas, 2003;Uygur, 2012 Cari işlemler dengesi; ekonomik büyüme, dış ticaret açığı, sermaye hareketleri, dış borç stoku ve petrol fiyatları gibi pek çok faktörden etkilenebilmektedir (Collins, Simone ve Hargreaves, 1998;Calderón, Chong ve Loayza, 1999;Orhan ve Nergiz, 2014;Özdamar, 2016;Eita, Manuel ve Naimhwaka, 2018).…”