Triple Deficit Hypothesis in Turkish economy in period of 1980-2015 and the problem of preventability of triple deficits

In this study, through investigating triple deficits' historical development in Turkish economy in the period of 1989-2019, some economy policy advices have been given in order to solve the triple deficits situation in the country's economy in the future. In the economy of the country, the econometric test has been done based on the period between 1980 and 2015. In Turkish economy, the condition of the triple deficits hypothesis has been econometrically tested by using Least Squares Method, Augmented Dickey-Fuller (ADF) and Phillips Perron (PP) unit root tests, then ARDL Boundary Test, Error Correction Model of ARDL Boundary Test, VECM (Vector Error Correction Model) analysis and afterwards Granger causality analysis. The results of Granger causality analysis that is derived from VECM analysis have been presented in the related tables. In the establishment of econometric model of the study, three variables that are rates of budget deficit, private sector's saving-investment deficit and current account deficit divided by GDP, have been used and two cointegration relationship (i.e. long-term relationship between the variables) have been found in the econometric model. According to the results of Granger Causality Analysis that is made in the study, following Granger causality relationships which are statistically significant have been found; current account deficit is a Granger reason of budget deficit and budget deficit is a Granger reason of private sector's saving-investment deficit in Turkish economy in the period under consideration.