Kalyoncu, Huseyin (2005): Sustainability of Current Account for Turkey: Intertemporal Solvency Approach. Published in: Praque Economic Papers , Vol. 14, No. 1 (January 2005): pp. 82-88.
Download (90kB) | Preview
This paper examines sustainability of current account for Turkey during the period 1987:1-2002:4. Using the usual intertemporal borrowing constraint, we have tested for a long-run relationship between two Turkey exports measures and imports measures (measured real terms and percentage to real GDP) using quarterly data. In our 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, β, is very close to 1. The empirical findings suggest that the current account of Turkey is sustainable in the long run.
|Item Type:||MPRA Paper|
|Original Title:||Sustainability of Current Account for Turkey: Intertemporal Solvency Approach|
|Keywords:||Current account deficits; Sustainability; Intertemporal budget constraint|
|Subjects:||F - International Economics > F3 - International Finance > F30 - General|
|Depositing User:||Huseyin KALYONCU|
|Date Deposited:||20 Dec 2006|
|Last Modified:||26 Jun 2016 15:46|
Ahmed, S., Rogers, J. H., (1995), “Government Budget Deficits and Trade Deficits. Are Present Value Constraints Satisfied in Long term Data.” Journal of Monetary Economics, 36(2), pp. 351-374.
Apergis, N., Katrakilidis, K.P., Tabakis, N.M., (2000), “ Current Account Deficit Sustainability: The Case of Greece.” Applied Economics Letters, 7, pp.599-603.
Dickey, D., Fuller, W. (1981), “The Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root.” Econometrica, 49, pp.1057-1072.
Fountas, S., Wu, J-L. (1999), “Are The U.S. Current Account Deficits Really Sustainable?”, International Economic Journal, 13(3), Autumn, pp.51-58.
Hakkio, C.S., Rush, M. (1991), “Is the Budget Deficit “Too Large?” Economic Inquiry, 39(July), pp.429-445.
Hamilton, J. D., Flavin, M.A. (1986), “On the Limitations of Government Borrowing: A Framework for Empirical Testing.” American Economic Review, 76(4), pp.808-819.
Husted S. (1992), “The Emerging U.S. Current Account Deficit in the 1980s: A Cointegration Analysis,” The Review Of Economics&Statics, February, pp. 159-166.
Johansen, S., Juselius, K., (1990), “Maximum Likelihood Estimated and Inference on Cointegration with Application to the Demand for Money.” Oxford Bulletin of Economics and Statistics, 52, pp.169-210.
Kwiatkowski, D., Philips, P.C.B., Schmidt, P., Shin, Y., (1992), “ Testing the Null Hypothesis of Stationary Against the Alternative of a Unit Root. How Sure Are We that Economic Time Series Have a Unit Root?” Journal of Econometrics, 54, pp.159-178.
MacKinnon, J. G., (1991), “Critical Value for Cointegration Tests.” in Engle, R.F., Granger, C.W.J., eds., Long-Run Economic Relationships: Reading in Cointegration. Oxford: Oxford University Press, pp.267-276.
Said, E. S., Dickey, D. A., (1994), “Testing for Unit Roots in Autoregressive-Moving Average Models of Unknown Order.” Biometrika, 71, pp.599-607.
Sawada, Y. (1994), “Are the Heavily Indebted Countries Solvent: Tests of Intertemporal Borrowing Constraints.” Journal of Development Economics, 45, pp.325-337.
Tanner, E., Liu, P., (1994), “Is the Budget Deficit ‘Too Large’: Some Further Evidence.” Economic Inquiry, 32, pp. 511-518.
Trehan, B., Walsh, C. (1991), “Testing Intertemporal Budget Constraints: Theory and Applications to U.S. Federal Budget and Current Account Deficits.” Journal of Money, Credit, and Banking, 23 (2), pp. 206-223.
Wilcox, D. (1989), “The Sustainability of Government Deficits: Implications of the Present-Value Borrowing Constraint.” Journal of Money, Credit, and Banking 21 (3), pp. 291-306.
Wu, J-L., Stilianos, F., Chen, S-L. (1996), “ Testing for the Sustainability of the Current Account Deficit in Two Industrial Countries.” Economics Letters, 52(2), pp.193-198.