Is There Any Time-Varying Relationship between Fiscal and Trade Deficits in Turkey?
Articles > Article · 2016
Authors: Barış GÖK, Abdurrahman Nazif ÇATIK
Prague Economic Papers, Journal Indexed in SCI Expanded, International, WoS, 2016, vol 25, pp 607-616
DOI: 10.18267/j.pep.577
Summary
In this article we analyse the evolution of the relationship between budget and trade deficits in Turkey covering the period 1985:1 to 2013:4. The structural break tests suggest the existence of a regime shift after the severe 2001 crisis. Time-varying responses obtained from the TVP-VAR model up to 2003 support the Keynesian view by providing evidence in favour of twin deficits, whereas the remaining responses suggest the remarkable divergence between fiscal and trade deficits.