Ball and chain effect: Is Turkey's growth rate constrained by current account deficit?
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2020
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Metapodaci
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Persistent and unsustainable current account deficits imply continuous foreign borrowing. In this study, we investigate the causal relationship between Turkish current account deficits (CAD) and growth, by using both traditional Granger and Frequency Domain Causality Tests developed by Breitung and Candelon (BC hereafter) over the period of first quarter of 2002 to the first quarter of 2017, since there is scarcely any definitive empirical study out there yet, systematically exploring the causal relationship between GDP growth and current account over short- and longer run. The results of the study indicate that rising CAD unidirectionally causes growth in both short- and medium-run. Thus, since CAD is financed mostly by short-term debt-creating inflows and Turkey is considered to be the most credit-dependent country across all emerging markets, while Turkey's excessive reliance on foreign credit comes at the cost of extremely volatile real GDP growth rates, our result raises many doub...ts about sustainability and stability of future growth trajectory in Turkey.
Ključne reči:
Turkey / Time domain causality / Thirlwall law / Frequency domain causality / Current account deficit / Credit impulseIzvor:
Physica A-Statistical Mechanics and Its Applications, 2020, 558Izdavač:
- ELSEVIER, AMSTERDAM
DOI: 10.1016/j.physa.2020.124997
ISSN: 0378-4371
WoS: 000567089400036
Scopus: 2-s2.0-85088984704
Institucija/grupa
Fakultet poslovne ekonomijeTY - JOUR AU - Ozer, Mustafa AU - Malović, Marko PY - 2020 UR - https://redun.educons.edu.rs/handle/123456789/406 AB - Persistent and unsustainable current account deficits imply continuous foreign borrowing. In this study, we investigate the causal relationship between Turkish current account deficits (CAD) and growth, by using both traditional Granger and Frequency Domain Causality Tests developed by Breitung and Candelon (BC hereafter) over the period of first quarter of 2002 to the first quarter of 2017, since there is scarcely any definitive empirical study out there yet, systematically exploring the causal relationship between GDP growth and current account over short- and longer run. The results of the study indicate that rising CAD unidirectionally causes growth in both short- and medium-run. Thus, since CAD is financed mostly by short-term debt-creating inflows and Turkey is considered to be the most credit-dependent country across all emerging markets, while Turkey's excessive reliance on foreign credit comes at the cost of extremely volatile real GDP growth rates, our result raises many doubts about sustainability and stability of future growth trajectory in Turkey. PB - ELSEVIER, AMSTERDAM T2 - Physica A-Statistical Mechanics and Its Applications T1 - Ball and chain effect: Is Turkey's growth rate constrained by current account deficit? VL - 558 DO - 10.1016/j.physa.2020.124997 UR - conv_1049 ER -
@article{ author = "Ozer, Mustafa and Malović, Marko", year = "2020", abstract = "Persistent and unsustainable current account deficits imply continuous foreign borrowing. In this study, we investigate the causal relationship between Turkish current account deficits (CAD) and growth, by using both traditional Granger and Frequency Domain Causality Tests developed by Breitung and Candelon (BC hereafter) over the period of first quarter of 2002 to the first quarter of 2017, since there is scarcely any definitive empirical study out there yet, systematically exploring the causal relationship between GDP growth and current account over short- and longer run. The results of the study indicate that rising CAD unidirectionally causes growth in both short- and medium-run. Thus, since CAD is financed mostly by short-term debt-creating inflows and Turkey is considered to be the most credit-dependent country across all emerging markets, while Turkey's excessive reliance on foreign credit comes at the cost of extremely volatile real GDP growth rates, our result raises many doubts about sustainability and stability of future growth trajectory in Turkey.", publisher = "ELSEVIER, AMSTERDAM", journal = "Physica A-Statistical Mechanics and Its Applications", title = "Ball and chain effect: Is Turkey's growth rate constrained by current account deficit?", volume = "558", doi = "10.1016/j.physa.2020.124997", url = "conv_1049" }
Ozer, M.,& Malović, M.. (2020). Ball and chain effect: Is Turkey's growth rate constrained by current account deficit?. in Physica A-Statistical Mechanics and Its Applications ELSEVIER, AMSTERDAM., 558. https://doi.org/10.1016/j.physa.2020.124997 conv_1049
Ozer M, Malović M. Ball and chain effect: Is Turkey's growth rate constrained by current account deficit?. in Physica A-Statistical Mechanics and Its Applications. 2020;558. doi:10.1016/j.physa.2020.124997 conv_1049 .
Ozer, Mustafa, Malović, Marko, "Ball and chain effect: Is Turkey's growth rate constrained by current account deficit?" in Physica A-Statistical Mechanics and Its Applications, 558 (2020), https://doi.org/10.1016/j.physa.2020.124997 ., conv_1049 .