E-ISSN 2791-9439 | ISSN 1300-1868
 

Original Article 


Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey

Metin BAYRAK; Ömer ESEN.

Cited by (5)

Abstract
There are generally two different views that explain development process of Twin deficits. The first approach that tries to explain “Twin Deficits Hypothesis” is Conventional Keynesian Approach and the other one is Ricardian Equivalence Approach. While the Conventional Keynesian proposition claims that budget deficits led to current account deficits, on the other hand the Ricardian Equivalence Hypothesis claims that there is no relationship between the budget deficits and current account deficits. In this paper the relationship between foreign trade balance and current account balance is researched by using annual data for 1975 and 2010 periods in Turkey. In order to search the direction and size of the association between analyzed variables, Johansen cointegration and error correction model have been employed. The empirical findings of the study reveal that for the concerning period, it is found that there is a relationship between budget deficits and current account deficits in both the short and long run. These results support the Conventional Keynesian Theory and refuse the Ricardian Equivalence Hypothesis.

Key words: Twin Deficits, Current Account Balance, Budget Balance, Cointegration Analysis, Error Correction Model. JEL Classification: C53, F32, H62



BÜTÇE AÇIKLARININ CARİ İŞLEMLER DENGESİ ÜZERİNE ETKİLERİ: İKİZ AÇIKLAR HİPOTEZİNİN TÜRKİYE AÇISINDAN DEĞERLENDİRİLMESİ

Ozet
İkiz açıkların oluşma sürecini açıklayan genel olarak iki farklı görüş bulunmaktadır. “İkiz Açık Hipotezini” açıklamaya çalışan yaklaşımlardan ilki “Geleneksel Keynesyen Yaklaşımı”, diğeri ise “Ricardian Denkliği Yaklaşımı” dır. Geleneksel Keynesyen öngörü, bütçe açıklarının cari işlem açıklarına yol açacağını ileri sürerken, Ricardian denkliği hipotezi de bütçe açıkları ile cari işlem açıkları arasında her hangi bir ilişkinin olmadığını iddia eder. Bu çalışmada, Türkiye’de bütçe dengesi ile cari işlemler dengesi arasındaki ilişki, 1975 ile 2010 dönemi arasında yıllık veriler kullanılarak araştırılmıştır. Ele alınan değişkenler arasındaki ilişkinin yönü ve büyüklüğünü araştırmak üzere Johansen eşbütünleşme ve hata düzeltme modeli uygulanmıştır. Elde edilen ampirik sonuçlara göre, inceleme dönemi için, bütçe açıkları ile cari işlem açıkları arasında kısa ve uzun dönemli bir ilişki olduğu sonucuna varılmıştır. Bu sonuçlar, Geleneksel Keynesyen Yaklaşımı destekler ve Ricardian Denkliği Yaklaşımı reddeder yöndedir.

Anahtar Kelimeler: İkiz Açıklar, Cari İşlem Dengesi, Bütçe Dengesi, Eşbütünleşme Analizi, Hata Düzeltme Modeli. JEL Sınıflaması: C53, F32, H62.


 
ARTICLE TOOLS
Abstract
PDF Fulltext
How to cite this articleHow to cite this article
Citation Tools
Related Records
 Articles by Metin BAYRAK; Ömer ESEN
on Google
on Google Scholar


REFERENCES
ACARAVCI, Ali, ÖZTÜRK, Ýlhan (2008), "Twin Deficits Phenomenon: Empirical Evidence from the ARDL Bound Test Approach for Turkey", International Journal of Statistics & Economics, 2(A08), 57-64.
AKBOSTANCI, Elif, TUNÇ, Gul Ý. (2002), “Turkish Twin Deficit: An Error Correction Model of Trade Balance”, Middle East Technical Universty, ERC Working Papers, No: 01/06, 1-17.
AKDOÐAN, Abdurrahman (1989), Kamu Maliyesi, Gazi Üniversitesi Yayinlari, Ankara.
AKSU, Hayati, BAÞAR, Selim (2005), “Ýkiz Açiklar Hipotezinin Turkiye Açisindan Araþtirilmasi”, Ýktisat, Ýsletme ve Finans Dergisi, C.20, S.234, 109-114.
AKSU, Hayati, BAÞAR, Selim (2009), “Turkiye Ýçin Ýkiz Açiklar Hipotezi'nin Tahmini: Bir Sinir Testi Yaklaþim”, Ankara Üniversitesi SBF Dergisi, C.64, S.4, 1-14.
Alkswani, M. Alkhatib (2000), “The Twin Deficit Phenomenon in Petroleum Economy: Evidence from Saudi Arabia”, Seventh Annual Conference, Economic Research Forum (ERF), Amman.
ANORUO, Emmanuel, RAMCHANDER, Sanjay (1998), “Current Account and Fiscal Deficits: Evidence From Five Developing Economies of Asia”, Journal of Asian Economics, C.9, S.3, 487-501.
Ay, A., Karaçor, Z., MUCUK, M., ERDOÐAN, S. (2004), “Butçe Açigi-Cari Ýþlemler Açigi Arasindaki Ýliþki: Turkiye Örnegi (1992-2003)”, Selçuk Üniversitesi SBE Dergisi, Sayi:12, 75-82.
Baharumshah, A.Z., LAU, Evan (2007), “Dynamics of Fiscal and Current Account Deficits in Thailand: An Empirical Investigation”, Journal of Economic Studies, Vol.34, No.6, 454-475
Baharumshah, A.Z., LAU, Evan, KHALÝD, A. M. (2006), “Testing Twin Deficits Hypothesis Using VARs and Variance Decomposition”, Journal of the Asia Pacific Economy, Vol.11, No.3, 331-354.
BAHMANI-OSKOOEE, Mohsen (1992), “What Are the Long-Run Determinants of the U.S. Trade Balance?”, Journal of Post Keynesian Economics, Vol.15, No.1, 85-97.
BAHTÝYAR, Gorkem, BAKIR, Hasan (2011), "Turkiye’de Ýkiz Açik Hipotezi", Ekonomi Bilimleri Dergisi, C.3, S.2, 79-88.
BARIÞIK, Salih, KESÝKOÐLU, Ferdi (2010), “Makro Ekonomik Degiþken Olarak Butçe Açigi-Cari Açik Ýliþkisi: Geliþmekte Olan Piyasalar Örnegi”, Ýktisat Ýþletme ve Finans, C.2, S.294, 109-127.
BEGG, David, FISCHER, Stanley, DORNBUSCH, Rudiger (1994), Economics, MC.Graw-Hill Book Company, Fourth Edition.
Bilgili, F., Bilgili, E. (1998), “Butçe Açiginin Cari Ýþlemler Üzerindeki Etkileri: Teori ve Uygulama”, Ýktisat, Ýþletme ve Finans Dergisi, C.13, S.146 (sayinin eki), 4-16.
BLECKER, Robert A. (1992), Beyond the "Twin Deficits": A Trade Strategy for the 1990's, USA: Armonk, N.Y, Economic Policy Institute.
Bolat, S., Belke, M., Aras, O. (2011), "Turkiye’de Ýkiz Açik Hipotezinin Geçerliligi: Sinir Testi Yaklaþimi", Maliye Dergisi, Sayi:261, 247-364.
BOZKURT, Hilal (2007), Zaman Serileri Analizi, Ekin Kitabevi, Bursa.
Cebula, J. Richard (1987), The Deficit Problem in Perspective, Lexington Books.
CHOWDHURY, Khorshed, SALEH, A. Salman (2007), “Testing the Keynesian Proposition of Twin Deficits in the Presence of Trade Liberalisation: Evidence from Sri Lanka”, Wollongong Economics Working Paper, No: 07-09, CORSETTI, Giancarlo and MULLER, Gernot J. (2006) “Twin Deficits: Squaring Theory, Evidence and Common Sense”, Economic Policy, Vol.21, No.48, 597–638.
ÇETÝNTAÞ, Hakan, BARIÞIK, Salih (2005), “Yapisal Kirilma, Birim Kok ve Ýkiz Açiklar Hipotezi: Turkiye’den Ampirik Bulgular”, Maltepe Üniversitesi Ekonomik, Toplumsal ve Siyasal Analiz Dergisi,, Sayi:1, 43-57.
DARRAT, Ali F. (1988), “Have Large Budget Deficits Caused Rising Trade Deficits?”, Southern Economic Journal, Vol.54, No.4, 879-887.
Dickey, D.A., Fuller, W.A. (1981), “Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root”, Econometrica, Vol.49, No.4, 1057-73. [DOI via Crossref]   
DPT, Ekonomik ve Sosyal Gostergeler, http://www.dpt.gov.tr
ENDERS, Walter, LEE, Bong-Soo (1990), “Current Account and Budget Deficits: Twins or Distant Cousins?”, The Review of Economics and Statistics, Vol.72, No.3, 373-381.
ERCEG, Christopher J., GUERRIERI, Luca, GUST, Christopher (2005), “Expansionary Fiscal Shocks and the US Trade Deficit”, International Finance, Vol.8, No.3, 363-397.
ERDÝNÇ, Zeynep (2008), “Ýkiz Açiklar Hipotezinin Turkiye’de 1950-2005 Yillari Arasinda Eþbutunleþme Analizi ve Granger Nedensellik Testi Ýle Ýncelenmesi”, AÜ, Sosyal Bilimler Dergisi, C.8, S.1, 209-222.
ERGÝNAY, Akif (1994), Kamu Maliyesi, Ankara: Savaþ Yayinlari.
Gujarati, D.N. (1999), Temel Ekonometri, (Çev.Ü. Þenesen ve G.G. Þenesen), Literatur Yay., Ýstanbul.
HATEMI-J, Abdulnasser, SHUKUR, Ghazi (2002), “Multivariate-based causality tests of twin deficits in the US”, Journal of Applied Statistics, Vol.29, No.6, 817-824.
HEILBRONER, Robert L., BERNSTEIN, Peter L. (1989), The Debt and the Deficit: False Alarms/Real Possibilities, W. W. Norton & Company.
HYMAN, David N.(1990), Public Finance: A Contemporary Application of Theory to Policy, 3rd. Ed., The Dryden Press, Chicago.
ÝNCE, Macit (2001), Devlet Borçlari ve Turkiye, Gazi Kitabevi, Ankara.
Johansen, S. (1995), “Likelihood Based Inference in Cointegrated Vector Autoregressive Models”, Oxford University Press, UK. [DOI via Crossref]   
Johansen, S.. (1988). “Statistical Analysis of Cointegrating Vectors”, Journal of Economic Dynamics and Control, Vol.12, No.2-3, 231–254.
Kaufmann, S., Scharler, J., Winckler, G. (2002), “The Austrian Current Account Deficits: Driven by Twin Deficits or by Intertemporal Expenditure Allocation?”, Empirical Economics, Vol.27, No.3, 529-542. [DOI via Crossref]   
KHALID, Ahmed M., GUAN, Teo W. (1999), “Causality Tests of Budget and Current Account Deficits: Cross-Country Comparisons”, Empirical Economics, Vol.24, No.3, 389-402.
KLEIN, Lawrence R. (2006), “Issues Posed by Chronic US Deficit”, Journal of Policy Modeling,Vol.28, No.6, 673–677.
Kouassi, E., MOUGOUÉ, Mbodja, KYMN, Kern O. (2004), “Causality Tests of The Relationship Between The Twin Deficits”, Empirical Economics, Vol.29, No.3, 503-525.
KULKARNI, Kishore G., ERICKSON, Erick Lee (2001), “Twin Deficit Revisited: Evidence From India, Pakistan And Mexico”, The Journal of Applied Business Research, Vol.17, No.2, 97-104.
Kuþtepeli, Y. Rabia (2001), “An Empirical Investigation of the Feldstein Chain for Turkey”, Dokuz Eylul Üniversitesi Ýþletme Fakultesi Dergisi, C.2, S.1, 99-108.
KUTLAR, Aziz, ÞÝMÞEK, Muammer (2001), “Turkiye’deki Butçe Açiklarinin Diþ Ticaret Açiklarina Etkileri, Ekonometrik Bir Yaklaþim: (1984) (4)-2000 (2)”, DEÜ, IIBF Dergisi, C.16, S.1, 1-13.
LAU, Evan, TANG, T. Cheong (2009), “Twin Deficits in Cambodia: Are There Reasons for Concern? An Empirical Study”, Monash Economics Working Papers, No: 11-09.
LEACHMAN, Lori L., FRANCÝS, Bill (2002), “Twin Deficits: Apparition or Reality?”, Applied Economics, Vol.34, No.9, 1121-1132.
MANGIR, Fatih (2012), "Turkiye Ýçin Ýkiz Açiklar Hipotezi Testi (1980-2011)", Nigde Üniversitesi ÝÝBF Dergisi, C.5, S.2, 136-149.
MARINHEIRO, Carlos F. (2001), “Ricardian Equivalence: an Empirical Application to the Portuguese Economy”, Catholic University of Leuven, CES Discussion Paper Series No. 01.12., 1-41.
MILLER, Stephen M., RUSSEK, Frank S. (1989), “Are the Deficits Really Related?”, Contemporary Economic Policy, Vol.7, No.4, 91-115.
Onafowora, O.A., OWOYE, Oluwole (2006), “An Empirical Investigation of Budget and Trade Deficits: The Case of Nigeria”, The Journal of Developing Areas, Vol.39, No.2, 153-174.
ORHAN,Osman Z., ERDOÐAN, Seyfettin (2010), Genel Ekonomi, Umuttepe Yay., Kocaeli.
PAPADOGONAS, Theodore, STOURNARAS, Yannis (2006), “Twin Deficits and Financial Integration in EU Member-States”, Journal of Policy Modeling, Vol.28, No.5, 595–602.
PEHLÝVAN, Osman (2006), Kamu Maliyesi, Derya Kitabevi, Trabzon.
PERKINS, James O. Newton (1997), Budget Deficits and Macroeconomic Policy, New York, St. Martin's Press.
PIERSANTI, Giovanni (2000), “Current Account Dynamics and Expected Future Budget Deficits: Some International Evidence”, Journal of International Money and Finance, Vol.19, No.2, 255–271.
RICCIUTI, Roberto (2003), “Assessing Ricardian Equivalence”, Journal of Economic Surveys, Vol.17, No.1, 55-78.
ROSENSWEIG, Jeffrey A., TALLMAN, Ellis W. (1993), “Fiscal Policy And Trade Adjustment: Are The Deficits Really Twins?”, Economic Inquiry, Vol.31, No.4, 580-594.
SALVATORE, Dominick (2006), “Twin Deficits in the G-7 Countries and Global Structural Imbalances”, Journal of Policy Modeling, Vol.28, No.6, 701-712.
SEATER, John J. (1993),“Ricardian Equivalence”, Journal of Economic Literature, Vol.31, No.1, 142-190.
Sevuktekin, M., Nargeleçekenler, M. (2010), Ekonometrik Zaman Serileri Analizi - Eviews Uygulamali, Nobel Yayin Dagitim, Geliþtirilmiþ 3. Baski.
SEYÝDOÐLU, Halil (2009), Uluslararasi Ýktisat: Teori, Politika ve Uygulama, Guzem Yay., Ýstanbul.
Stanley, T. D. (1998), “New Wine in Old Bottles: A Meta-Analysis of Ricardian Equivalence”, Southern Economic Journal, Vol.64, No.3, 713-727. [DOI via Crossref]   
TCMB, Elektronik Veri Dagitim Sistemi, http://evds.tcmb.gov.tr
TUNÇSÝPER, Bedriye, SÜREKÇÝ, Dilek (2011), “Turkiye’de Ýkiz Açiklar Hipotezinin Geçerliliginin Zaman Serisi Analizi”, AÜ Sosyal Bilimler Dergisi, C.11, S.3, 103–120.
Ugur, A. Atilla, KARATAY, Pelin (2009), “Ýkiz Açiklar Hipotezi: Teorik Çerçeve ve Hipoteze Yonelik Yaklaþimlar”, Sosyoekonomi, Sayi:1, 101-122.
UTKULU, Utku (2003), “Turkiye’de Butçe Açiklari ve Diþ Ticaret Açiklari Gerçekten Ýkiz mi? Koentegrasyon ve Nedensellik Bulgulari”, DEÜ, IIBF Dergisi, C.18, S.1, 45-61.
Ümit, A. Öznur, YILDIRIM, Kemal (2008), “Ýkiz Açiklar Hipotezi: Turkiye Analizi”, Ýktisat, Ýsletme ve Finans Dergisi, C.23, S.267, 116-132.
VAMVOUKAS, George A. (1999), “The Twin Deficits Phenomenon: Evidence From Greece”, Applied Economics, Vol.31, No.9, 1093-1100.
WISSEM, Ajili (2007), “The “Twin Deficits”: Are They Really Twins? An Empirical Investigation of the Case of a Small Developing Economy”, The IUP Journal of Applied Economics, Vol.6, No.1, 42-73.
YAPRAKLI, Sevda (2010), “Turkiye’de Esnek Doviz Kuru Rejimi Altinda Diþ Açiklarin Belirleyicileri: Sinir Testi Yaklaþimi”, Ankara Üniversitesi Siyasal Bilgiler Fakultesi Dergisi, C.65, S.4, 141-163.
Yay, G. Gurkan, TAÞTAN, Huseyin (2007), “Ýkiz Açiklar Olgusu: Frekans Alaninda Nedensellik Yaklaþimi”, Ý.Ü. Siyasal Bilgiler Fakultesi Dergisi, Sayi:37,87-111.
YÜCEL, Fatih, ATA, A. Yilmaz (2003), “Eþ-Butunleþme ve Nedensellik Testleri Altinda Ýkiz Açiklar Hipotezi: Turkiye Uygulamasi”, ÇÜ Sosyal Bilimler Dergisi, C.12, S.12, 1-13.
ZIVOT, Eric, ANDREWS, D.W.K. (1992), “Further Evidence of Great Crash, the Oil- Price Shock and the Unit Root Hypothesis”, Journal of Business and Economic Statistics, Vol.10, No.3, 251-270.

This Article Cited By the following articles

İkiz Açık Hipotezinin Geçerliliğinin Kırılgan Beşli Ülkeleri İçin Test Edilmesi
2020; (): 143.

1
 
MAKROEKONOMİK DENGEDE ÜÇÜZ AÇIK SORUNU: TÜRKİYE İÇİN 1975 – 2015 DÖNEMİ ARDL MODEL İLE TAHMİN EDİLMESİ
2020; 42(1): 1.

2
 
Bütünleşik Çok Kriterli Karar Verme Modeli ile Türkiye’deki Üniversitelerin Ödenek ve Harcama Açısından Performans Analizi
2018; (): 349.

3
 
The structure and sustainability of current account deficit: Turkish evidence from regime switching
The Journal of International Trade & Economic Development 2016; 25(4): 570.

4
 
The structure and sustainability of current account deficit: Turkish evidence from regime switching
The Journal of International Trade & Economic Development 2015; (): 1.

5
 
How to Cite this Article
Pubmed Style

BAYRAK M, ESEN O. [Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey]. Ekonomik Yaklasim. 2012; 23(82): 23-49. Turkish. doi:10.5455/ey.20001


Web Style

BAYRAK M, ESEN O. [Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey]. https://www.ekonomikyaklasim.org/?mno=34382 [Access: January 01, 2023]. Turkish. doi:10.5455/ey.20001


AMA (American Medical Association) Style

BAYRAK M, ESEN O. [Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey]. Ekonomik Yaklasim. 2012; 23(82): 23-49. Turkish. doi:10.5455/ey.20001



Vancouver/ICMJE Style

BAYRAK M, ESEN O. [Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey]. Ekonomik Yaklasim. (2012), [cited January 01, 2023]; 23(82): 23-49. Turkish. doi:10.5455/ey.20001



Harvard Style

BAYRAK, M. & ESEN, . O. (2012) [Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey]. Ekonomik Yaklasim, 23 (82), 23-49. Turkish. doi:10.5455/ey.20001



Turabian Style

BAYRAK, Metin, and Omer ESEN. 2012. [Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey]. Ekonomik Yaklasim, 23 (82), 23-49. Turkish. doi:10.5455/ey.20001



Chicago Style

BAYRAK, Metin, and Omer ESEN. "[Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey]." Ekonomik Yaklasim 23 (2012), 23-49. Turkish. doi:10.5455/ey.20001



MLA (The Modern Language Association) Style

BAYRAK, Metin, and Omer ESEN. "[Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey]." Ekonomik Yaklasim 23.82 (2012), 23-49. Print.Turkish. doi:10.5455/ey.20001



APA (American Psychological Association) Style

BAYRAK, M. & ESEN, . O. (2012) [Effects of Budget Deficit on Current Account Balance: Analysis of Twin Deficits Hypothesis in Case of Turkey]. Ekonomik Yaklasim, 23 (82), 23-49. Turkish. doi:10.5455/ey.20001