An application on comparison of bayesian model with linear regression models

The purpose of this study is to carry out regression analysis in the line with Bayesian principles by pointing out the main features of Bayesian approach. In regression analysis, Bayesian approach can realize more effective parameter estimation by means of providing the opportunity to use prior information. The inference about parameters, hypothesis testing or confidence interval are performed on the basis of the both prior information and sampling information we have. There is no need to apply the inference procedure in terms of their behavior in repeated. Bayesian approach especially provides solutions to the problems that are met in size. Any longer, there is no difficulty to comute numerical integration of the applications within the Bayesian context as the technical impovements of computer effort and software products are increased. World economies have financial crisis experience; especially Latin America and Southeast Asian countries because of having external imbalances at the end of 1980?s and 1990?s. The ways of theoretical current account adjustment have become invalid since high volume of capital inflows raised. However in the last period intertemporal consumption theory became more popular in the economic literature. In this view if a debtor country satisfies ist intertemporal budget constraint then ists curren account deficit will be sustainable. Also Turkish economy hax experience of high volume capital outflows therefore current account deficits were become unsustainable in 1994, 2001 and 2008 years. Afer 2001?s Turkey?s current account deficits have reaching maximum levels so that Turkey?s current account position is argued again. In this study is to analyze the reasons of Turkey Account Deficit with the OLS and Bayesian regression method. For this purpose both the foreign trade volume and GDP include the each model as independent variables. Keywords; OLS, Bayesian Regression, Current Account Deficit, Johansen Cointegration Test