The sustainability of current account deficit: An empirical investigation on Turkey

The current account balance and its sutainability is of great importance after accelaration of the liberalization of world economy especialy in respect of the developing countries. However, the open economy policies applied caused for the problem of current account deficit in relevant countries to effect the growth and development negatively.This issue is very important for Turkey which lives with current account deficits and macro economic instability for many years especially after 1990`s period. Because the analyses the effects of current account deficits the sustainability of current account deficits on macro economic developments enable to improve some political offers for more stable macro economic enviroment.In sense, in the first part of this study, the importance of current balance account which is included in the balance of payments was analysed as an indicator of macro economics by the theorical context. In the second part of this study, the different theoretical approachs to the current account deficit and the conditions of sustainability of the current account deficit are explained. In the third and the last part of this study, firstly, the evaluation of current balance of payment in Turkey were tried to introduced then the sustaniability of the current account deificit analysed with a study by using the recent data of the Turkish economy.Key Words: Current Account Balance, Sustainability, Balance of Payments, Turkish Economy, Cointegration