The Turkish Current Account Deficit PDF Download
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Author: Osman Furkan Abbasoglu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
During the 2011-2015 period, Turkey's current account deficit as a percentage of gross domestic product (GDP) was one of the largest among the Organization for Economic Co-operation and Development countries. In this paper, we examine if this deficit can be considered optimal using the Engel and Rogers's approach. In this framework, the current account of a country is determined by the expected discounted present value of its future share of world GDP relative to its current share. A country whose income is anticipated to rise relative to the rest of the world is expected to borrow now and run a current account deficit. Our findings suggest that Turkey's current account deficit in 2015 may be considered optimal if the Turkish economy's share in the world economy could continue to grow at rates similar to the past or to the predictions from professional forecasts. The same approach, however, indicates that the current account deficit in 2011, at its peak, was unlikely to be optimal.
Author: Osman Furkan Abbasoglu
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
During the 2011-2015 period, Turkey's current account deficit as a percentage of gross domestic product (GDP) was one of the largest among the Organization for Economic Co-operation and Development countries. In this paper, we examine if this deficit can be considered optimal using the Engel and Rogers's approach. In this framework, the current account of a country is determined by the expected discounted present value of its future share of world GDP relative to its current share. A country whose income is anticipated to rise relative to the rest of the world is expected to borrow now and run a current account deficit. Our findings suggest that Turkey's current account deficit in 2015 may be considered optimal if the Turkish economy's share in the world economy could continue to grow at rates similar to the past or to the predictions from professional forecasts. The same approach, however, indicates that the current account deficit in 2011, at its peak, was unlikely to be optimal.
Author: Özcan Karahan
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Purpose: This study aims to examine the sustainability of the current account deficit in Turkey for the quarterly data between 2003 and 2018. Besides, some policy implications are made to ensure the sustainability of the current account deficit in Turkey's economy. Design/methodology/approach: The dynamics related to the sustainability of the current account deficit is analysed within the framework of the "intertemporal budget constraint approach" developed by Husted (1992). The long-term dynamics are empirically investigated using the Johansen cointegration test. Econometric analysis is also expanded within the framework of the Vector Error Model to reveal the short-term dynamics. Findings: The results of Johansen cointegration analysis suggest that current account income and expenses are integrated with the cointegrating coefficient less than 1, implying that Turkey has a weak form of current account deficit sustainability. Findings of the Vector Error Correction model confirm the results of long-run analysis and indicates that the deviations from the long-term equilibrium are corrected at a rate of 78% every quarter term. Research limitations/implications: The "intertemporal budget constraint approach" developed by Husted (1992) focuses on the equilibrium between current account income and expenses to analyse the sustainability of the foreign balance. However, the sustainability of the foreign deficit is also closely related to what kind of capital inflows is used to finance the foreign deficit. Therefore, the implications made regarding the sustainability of the current account deficit in Turkey based on the Husted model should be accepted with some reservations. Originality/value: Since external imbalances are a key challenge for most of the developing countries to provide full integration into the world economy, many empirical studies are examining the current account sustainability. The majority of these studies focus on the long-run dynamics of the current account imbalances. Unlike most of the previous studies, this paper also focuses on the short-run dynamics of the current account balance. Thus, the difference of this study from other studies stems from the examination of the dynamics of current account sustainability not only in the long term but also in the short term.
Author: Ali Hepsen
Publisher:
ISBN:
Category :
Languages : en
Pages : 15
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Book Description
Current account deficit has been a popular research topic among Turkish economists. The study investigates the relation between current account deficit of Turkey and house prices in the country. This paper uses the classical linear regression model and this is run for three times. The results of the model indicate that current account deficit is positively associated with house price changes in Turkey. Another result is that, GDP per capita growth is not significantly associated with house price changes. Not surprisingly, inflation is also positively associated to house prices. The important outcome of the study is that Turkey might experience similar housing market problems in Spain and US as a consequence of Turkey's effort to decrease its current account deficit. Therefore, the study is expected to attract policy maker's attention and start a discussion on how to maintain the current condition of housing market while decreasing the current account deficit. Even though there have been many research on the relation between macroeconomic indicators and house prices, to our knowledge this is the first research on the impact of current account deficit on house prices.
Author: Murat Çimen
Publisher: Cambridge Scholars Publishing
ISBN: 1443867896
Category : Business & Economics
Languages : en
Pages : 150
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Book Description
Since the 1950s, the Turkish economy has periodically been facing crises. Decisions taken after crisis do not only have economic effects, but also social, political and diplomatic consequences. For the country, total independence was considered the main principle; economic independence was one of the substantial criteria of that principle, and economic policies were based on it. In this book, the economic independency level at which governments can take independent decisions is defined in terms of macroeconomic variables, on which the proposed model is based and developed. The book aims to analyse the economic policies of Turkey, from an economic dependency perspective; identify the macroeconomic variables affecting economic dependency; and develop an alternative economic policy, taking all of these points into consideration. Therefore, in order to structure the proposed model and to define policies, it is crucial to discuss economic policies, particularly in the post-1980 world; their consequences and impacts on Turkey; crises and the main variables under which they occurred; and to compare the economic policies of the Republic period and their consequences as well. The book intends to develop an independent economic structure so that Turkey can act in her own interests.
Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
ISBN: 1498398073
Category : Business & Economics
Languages : en
Pages : 38
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Book Description
This Selected Issues paper examines the external imbalance situation in Turkey. Turkey’s current account deficit is expected to remain elevated at about 5.5 to 6 percent of GDP through 2019. Reducing the deficit to a more sustainable level about 2.5 to 3 percent of GDP should be a key policy priority. Applying the Global Integrated Monetary and Fiscal Model, the paper quantifies the impact of four different approaches in reducing the current account deficit. The analysis shows that policies that directly increase private or public savings can reduce the external imbalance without reducing private investment and that they have relatively modest negative growth implications.
Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
ISBN: 148435320X
Category : Business & Economics
Languages : en
Pages : 82
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Book Description
Growth rebounded sharply in 2017, helped by strong policy stimulus in the wake of the 2016 post-coup attempt slump and by favorable external conditions. Although expansionary policies were initially warranted, they are no longer appropriate as the economy is showing clear signs of overheating. Monetary policy appears too loose and its credibility is low; and on- and off-budget fiscal policies (including credit guarantee schemes and PPP activities) are expansionary and risk undermining Turkey’s hard-earned fiscal credibility. As a result, the economy faces internal and external imbalances: a positive output gap, inflation well above target, and a current account deficit of more than 5 percent of GDP. Meanwhile, political uncertainty and regional instability remain elevated, and the integration of the many refugees poses challenges.
Author: Oliver Röhn
Publisher:
ISBN:
Category :
Languages : en
Pages : 30
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Book Description
Author: Fazil Kayikçi
Publisher:
ISBN: 9783659965548
Category :
Languages : en
Pages : 232
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Book Description
Author: International Monetary Fund. European Dept.
Publisher: International Monetary Fund
ISBN: 1475553285
Category : Business & Economics
Languages : en
Pages : 87
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Book Description
This paper discusses key issues related to Turkey’s economy. Economic growth of Turkey continues to show resilience despite several shocks. Growth remains based on domestic demand, in turn, supported by accommodative monetary and fiscal policies. With the economy projected to grow at 3.8 percent in 2015, output and unemployment gaps are practically closed. But, growth is still below both the historical average and the authorities’ long-term target. Potential growth is also slowing. The employment rate is low, especially among women. To tackle these issues, the government has announced ambitious program of reforms aiming to increase potential growth and reduce external imbalances.
Author: David Knight
Publisher:
ISBN:
Category :
Languages : en
Pages : 40
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Book Description
Turkey has moved rapidly from a current account that was relatively in balance up to the turn of the millennia, to sustaining relatively large current account deficits over the past 15 years. Using annual data from 1986 to 2017 and a jackknife model-averaging estimator, the paper estimates the relationship between the current account balance and a set of determinants that are broadly consistent with the cross-country literature. These determinants include private sector credit, public expenditure, real exchange rate changes, gross domestic product growth relative to the rest of the world, trade openness, international oil prices, foreign direct investment levels, past net foreign assets, inflation volatility, and global levels of uncertainty. The analysis then decomposes the predicted current account balance for five-year periods to illustrate the factors that have driven the current account over time. Over 2003-07, a large current account deficit became established in Turkey, driven by an expansion of credit to households and rapid gross domestic product growth, coupled with improved macroeconomic stability that supported higher spending and therefore imports. Since then, the negative effect of household credit has abated, but was replaced in 2008-17 by an expansion of credit to the corporate sector as a driver of the current account deficit. The current account balance in Turkey is also found to be less persistent than.
