Current deficit from interest, inflation and currency currency perspectives; the case of Turkey

Currentaccountdeficit has startedtobecomeone of Turkey'schronicproblems in recentyears. The share of the currentaccountdeficit in the grossdomesticproductshould be takenundercontrol in ordertoachievemacroeconomicbalance. For this reason, analyzing the factorsaffecting the currentdeficit and revealingwhich has the mostshare in the currentaccountdeficit is of greatimportance for the economicpoliciesto be formed. In this study, Turkey'scurrentaccountdeficitbetween the years 2002-2019 will be analyzed by VAR model and Grangercausality test. The study aimstoreveal the totality of the factorsaffecting the currentaccountdeficit and the currentaccount is seen as deficitfinancing, but again, one of the majorproblems of Turkey'seconomy, inflation, foreigntrade has the mostimportantfactor in the exchange rate and triple the interest rate affects the foreigncapitalinflowto the country is toreveal the relationshipbetween the currentaccountdeficit.