The Relationship Between Economic Growth and Current Account Balance: The Case of Turkey

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High growth rates, resulting with process of globalization, cause current account deficits by increasing import capacity especially in developing countries. Due to raising the risk of country, increasing current account deficits create adverse effects on the growth process. So, the relationhip between economic development and current account balance of Turkey between 1980 and 2010 are analysed through the use of econometrical methods. Two variables, gross domestic product and current account balance, were included in the analyses. Time-series data related to the variables were tested with ADF unit root test and it was observed that the variables were stable in their level value. In addition, at the end of the Johansen co-integration test applied to these variables, it was realised that the mentioned variables were co-integrated. Granger causality test was employed to determine the causality relationship between the variables and a one-way causality relationship from economic development towards to current account balance was detected.

363

Economic Growth , Current Account Balance , Causality Test , Cointegration Test

Journal Of Graduate School Of Social Sciences

377

Journal Of Graduate School Of Social Sciences