External energy dependence as a cause of the current account deficit in the Turkish economy and an analysis on Turkey's energy policy

Considering that energy is an essential input in the economic growth of countries, it is seen that the energy literature initially developed mainly around the axis of economic growth, and the studies conducted within the framework of classical models mostly focused on this area. On the other hand, it is observed that the oil shock experienced in the 1970s caused instability not only in the economic growth rates of countries but also in basic macroeconomic variables such as inflation and unemployment. Turkey's balance of payments shows that Turkey has had a continuous current account deficit since 2004 (except for 2019). The current account deficit followed a decreasing course during the crisis years and generally increasing at other times. In the same years, it was observed that Turkey's energy balance moved in parallel with the foreign trade balance, the foreign trade deficit decreased during the periods when the energy deficit decreased, and the foreign trade deficit increased during the periods when the energy deficit increased. In this context, in the study; Within the framework of Turkey's foreign dependence on energy, the main reasons for the current account deficit, the energy policies, and targets pursued to reduce the current account deficit were examined and energy strategies were analyzed. In the empirical part of our study, how oil prices affect Turkey's current account balance is examined. In the study, Rolling-window analysis, based on both least squares and maximum entropy bootstrapping estimation method has been applied to see whether oil prices, Turkey's GDP, the total GDP of 27 European countries, and the real effective exchange rate have a time-varying effect on the current account. As a result of the analysis, it was seen that the decrease in oil prices in the analyzed period had a positive effect on the current account deficit.