The effect of fluctuations in exchange rate and current account deficit on tourism income: Turkey implementation

In the periods when the current account deficit, exchange rates and trade of the developing countries are adversely affected, tourism revenues are a breath of fresh air for the countries. In this study, the change in tourism income as a result of the stable or unstable outlook created by the changes in the Current Account Deficit and Exchange Rate in Turkey with the data between 01:2003 and 06:2021 is examined. The study has been examined with 2 different models due to the developments in the world and in Turkey. Model 1 was designed considering that there is no additional factor on Turkey's economic and political structure. Model 2, on the other hand, was created by taking into account the effects of the 2008 crisis, which had the most impact on both Turkey and the world economy and politics, and the effects of the Covid-19 (Corona) virus, and a dummy variable was added while examining the data. The stationarity tests of the series were performed by Lee and Strazicich (2003) Unit Root Test with Structural Break. The Maki (2012) Cointegration Test, which allows up to five breaks as a result of the series being stationary at the first difference (I1), and then the Wald Granger Causality test were applied. Tourism Income, Current Account Deficit and Exchange Rate variables of the result of the research were examined both with normal data and data containing dummy variables, and it was confirmed that there was a cointegration relationship between them. However, it has been determined that there is no long-term causality relationship between the long-term Tourism Income, Current Account Deficit and Exchange Rate data.