Comparing the simultaneous equation model and VAR model in point of forecasting success: A model of Turkish economy

Turkish economy has been damaged by fifteen economic crises during the history of Turkish Rebuplic. A great deal of stabilization program have been created in order to solve these crises and the resolutions which were included by the programs have been tried to put into practise for Turkish Economy. In this study, Stabilization Programs which were put into practise in order to solve the crises that have been appeared after 1980 in Turkish Economy and the crises which have been appeared after 2000 are examined. In the application part of the study, Turkish Economy is modeled by simultaneous equation model and VAR model respectively by using the values of some macroeconomic variables between 1980 and 2005 which belonged to crises after 1980. The forecasting values of these variables are obtained for 2006 and they are compared to their real values. The aim of this study is comparing the forecasting success of Simultaneous Equation model and VAR model. Key Words: Simultaneous Equation Model, VAR Model, Forecasting, Turkish Economy, Crises, Stabilization Programs