Current account defi̇ci̇t and saving relationship: Turkey example

Current account balance is one of the important issues frequently searched in the economic literature. It is regarded as a current issue as current account deficits are fundamental indicators of macro-stability and they have also some effects on other stability indicators. In this sense, it is necessary to reveal the content, dimensions and determinants of the current account deficit problem, which has become a fundamental problem in Turkey. Accordingly, this study aims to present suggestions in the light of the obtained findings. In the first part of the study, the conceptual explanations, theoretical approaches, basic information on determinants of current account deficit and its historical process was explained. In the second part, the process of the current account balance in Turkey's history and the developments that took place in historical process have been summarized. In the third part, the theoretical explanations of the methods to be used in the study are given and then the application stage is started. At this stage, the annual data of the Turkish economy for the period of 1980-2015, and the variables of domestic savings, economic growth and index of openness, which are influential on the current account deficit, were analyzed by the ARDL Boundary Test. In addition, using Toda-Yamamoto causality test, OLS analysis and correlation analysis deepened the study. At the end of the analysis, a positive and meaningful relationship was only observed between the current account deficits and the savings, while the predicted relationships for the other variables were determined. Investments and growth correlations of savings were compared because this relationship, which is in parallel with the Calderon argument, is contrary to the expectations. The analyses show that the growth-investment correlation is higher than the growth-saving correlation in Turkey. This result supports a basic study finding that includes increasing current account deficits despite increased savings. Keywords: Economic Growth, Current Account Deficit, Saving, Openness, ARDL