Author/Authors :
VAROL İYİDOĞAN, Pelin Hacettepe Üniversitesi - İktisadi ve İdari Bilimler Fakültesi - Maliye Bölümü, Turkey , ERKAM, Serkan Hacettepe Üniversitesi - İktisadi ve İdari Bilimler Fakültesi - Maliye Bölümü, Turkey
Title Of Article :
THE TWIN DEFICITS HYPOTHESIS: AN EMPIRICAL INVESTIGATION FOR TURKEY (1987-2005)
Abstract :
The aim of this study is to assert empirically the effect of budget deficit on current account deficit, i.e. twin deficits hypothesis, for Turkey over the period 1987-2005 by means of quarterly data. The twin deficits hypothesis, theoretically based on income-expenditure model, Mundell-Fleming model and savinginvestment interaction, has a wide literature. In the regarding literature, the results vary due to the selection of different sample groups and methodologies. In this study, the causal relation between budget balance and current account balance is analyzed by means of Granger causality analysis developed by Granger (1969). According to the results, the analysis does not provide any evidence supporting the validity of the twin deficits hypothesis. Contrarily, the results show that the movements of the current account balance is influential on the budget balance in Turkey.
NaturalLanguageKeyword :
Budget deficit , Current account deficit , Twin deficits hypothesis , Granger , causality analysis.
JournalTitle :
Pamukkale University Journal Of Social Sciences Institute
