Indian Journal of Finance

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The Relationship Between Capital Flows and Current Deficit : Evidence from Turkey


Affiliations
1 Assistant Professor, Department of Economics, Faculty of Economics and Administrative Sciences, Dr. Adiyaman University, Altinsehir Mah. 3005 Sok. No: 13, 02040, Adiyaman, Turkey
2 Assistant Professor, Department of International Trade and Logistics, Faculty of Economics and Administrative Sciences, Dr. Kilis 7 Aralik University, Mehmet Sanli Mah., Dogan Gures Pasa Bul. No:134, 79000. Kilis, Turkey
3 Assistant Professor, Kelkit Aydin Dogan Vocational High School, Department of Accounting and Tax Applications, Dr. Gumushane University, Ataturk Mah. 17 Subat Bul. 29600, Kelkit-Gumushane, Turkey

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The present paper analyzed the relationship between current account deficit and capital flows in Turkey over the period from 1990-2011. Augmented Dickey Fuller and Dickey Fuller-Generalized Least Squares unit ischolar_main tests were used to analyze the stability of current deficit (CA) and capital flows (CF) series. Then, autoregressive distributed lag (ARDL) bound test was used in order to check if there is cointegration between the series according to the results obtained from the ARDL test. To conclude, the study revealed that is a cointegration relationship between current deficit and capital flows in Turkey.

Keywords

Current Deficit, Capital Flows, ARDL Bound Test, Co-Integration, Turkey

E22, F21, F32

Paper Submission Date : April 29, 2014 ; Paper sent back for Revision : July 8, 2014 ; Paper Acceptance Date : August 8, 2014.

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  • The Relationship Between Capital Flows and Current Deficit : Evidence from Turkey

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Authors

Yusuf Ekrem Akbas
Assistant Professor, Department of Economics, Faculty of Economics and Administrative Sciences, Dr. Adiyaman University, Altinsehir Mah. 3005 Sok. No: 13, 02040, Adiyaman, Turkey
Mehmet Senturk
Assistant Professor, Department of International Trade and Logistics, Faculty of Economics and Administrative Sciences, Dr. Kilis 7 Aralik University, Mehmet Sanli Mah., Dogan Gures Pasa Bul. No:134, 79000. Kilis, Turkey
Canan Sancar
Assistant Professor, Kelkit Aydin Dogan Vocational High School, Department of Accounting and Tax Applications, Dr. Gumushane University, Ataturk Mah. 17 Subat Bul. 29600, Kelkit-Gumushane, Turkey

Abstract


The present paper analyzed the relationship between current account deficit and capital flows in Turkey over the period from 1990-2011. Augmented Dickey Fuller and Dickey Fuller-Generalized Least Squares unit ischolar_main tests were used to analyze the stability of current deficit (CA) and capital flows (CF) series. Then, autoregressive distributed lag (ARDL) bound test was used in order to check if there is cointegration between the series according to the results obtained from the ARDL test. To conclude, the study revealed that is a cointegration relationship between current deficit and capital flows in Turkey.

Keywords


Current Deficit, Capital Flows, ARDL Bound Test, Co-Integration, Turkey

E22, F21, F32

Paper Submission Date : April 29, 2014 ; Paper sent back for Revision : July 8, 2014 ; Paper Acceptance Date : August 8, 2014.




DOI: https://doi.org/10.17010/ijf%2F2014%2Fv8i11%2F71693