TESTING THE TWIN DEFICIT HYPOTHESIS for TURKIYE: THRESHOLD COINTEGRATOIN TEST

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Yaşgül Y. S., Güriş B., Turguter Y.

INTERNATIONAL ASIAN CONGRESS ON CONTEMPORARY SCIENCES – X, Dubai, Birleşik Arap Emirlikleri, 10 - 14 Aralık 2024, ss.386-393, (Tam Metin Bildiri)

• Yayın Türü: Bildiri / Tam Metin Bildiri
• Basıldığı Şehir: Dubai
• Basıldığı Ülke: Birleşik Arap Emirlikleri
• Sayfa Sayıları: ss.386-393
• Marmara Üniversitesi Adresli: Evet

Özet

Twin deficit is a concept used for situations where budget deficits and external deficits occur together. While

the Traditional Keynesian Approach emphasizes that there is a relationship between the two deficits, the

Ricardian Equivalence Approach reveals that there is no relationship between the two deficits. In this study,

the twin deficit hypothesis in Turkey was examined by using quarterly data from the period 2006:Q1-2024:Q1

through the threshold cointegration test. The findings obtained, in parallel with the predictions of the

Traditional Keynesian Approach, reveal that there is a long-run non-linear relationship between the budget

deficit and external deficit. In other words, it was determined that the twin deficit hypothesis was valid in

Turkey during the examined period.