Prague Economic Papers 2005, 14(1):82-88 | DOI: 10.18267/j.pep.254

Sustainability of Current Account for Turkey: Intertemporal Solvency Approach

Huseyin Kalyoncu
Department of Economics, Cukurova University 01330, Adana, TURKEY (e-mail: kalyuncu@cu.edu.tr).

This paper examines sustainability of current account for Turkey during the period 1987:Q1 - 2002:Q4. Using the usual intertemporal borrowing constraint, I have tested for a long-run relationship between Turkey exports and imports (measured in real terms to real gross domestic product) using quarterly data. In my empirical analysis of the sustainability of current account for Turkey, cointegration approaches have been used. Empirical results suggest that there exists a unique long-run or equilibrium relationship among real exports and imports and their percentage to real GDP and their estimated cointegration factor (b) is very close to 1. The empirical findings suggest that the current account of Turkey is sustainable in the long-run.

Keywords: current account deficits, sustainability, intertemporal budget constraint
JEL classification: E30, F30, G32

Published: January 1, 2005  Show citation

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Kalyoncu, H. (2005). Sustainability of Current Account for Turkey: Intertemporal Solvency Approach. Prague Economic Papers, 14(1), 82-88. doi: 10.18267/j.pep.254
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