Abstract
Budget deficit and current deficit issues are critical macro economic variables for most economies. Therefore, there has been a large number of academic work on this field. This study examines the causality relation between budget deficit, current deficit, exchange rate and interest rate in Turkey for 2001-2014 period. In empirical part of the work, we employ Toda Yamato causality test and we do not find any support for the twin deficit hypothesis. Our findings indicate that there is a unidirectional causality running from current deficit to budget deficit and a bi-directional causality between interest rate and budget deficit. We also find that there is a unidirectional causality running from exchange rate to budget deficit.
Details
| Journal Section | Articles |
|---|---|
| Authors | |
| Publication Date | October 31, 2016 |
| Submission Date | January 18, 2016 |
| Published in Issue | Year 2016 Volume: 9 Issue: 4 |
Ömer Halisdemir Universitesi Iktisadi ve Idari Bilimler Fakültesi Dergisi (OHUIIBF) is licensed under the Creative Commons Attribution-Noncommercial-Pseudonymity License 4.0 international license.