Economic growth and the current account deficit problem: Turkey (1980-2018)

In this study, the relationship between economic growth and current account deficit has been analyzed by operating the economic growth and current account deficit/GDP (Gross Domestic Product) datas through using Eviews programme in the period of 1980-2018. It's stationarity has been analyzed by Augmented-Dickey Fuller test and variables are proved to be cointegrated by using Engle-Granger test. Vector Error Correction Model (VECM) has been made and afterwards variables are showed to be cointegrated by using Johansen cointegration test apart. The quality testing of VECM has been made and no abnormality is detected. With the Granger causality test, an unilateral relationship which arises from current account deficit to economic growth, has been detected. After that, variance decomposition and action-reaction analyises has been made. As a result of the study, suggestions for solving the problematique of economic growth and current account deficit are given place.