Twin deficits and economic growth relationship: Turkey's example

The relationship between economic growth with twin deficit in this thesis has tried to be analyzed on the basis of examples of Turkey's economy and the world economy. Twin deficits mean that the budget deficit and the current deficit occur simultaneously in an economy. In the economic literature, a lot of work has been done on twin deficits. Keynesian twin deficit and Ricardian equivalence hypothesis are at the center of the studies. The aim of this study, the twin deficit hypothesis for a variety of world economies and Turkey Economy to determine whether it is valid and examine the relationships between twins with clear economic growth. However, the empirical examination of the thesis has been studied only with data from Turkey's Economy. Economy of Turkey Research in 1998Q2 - 2018Ç4 period ended quarter was used annual data. In this study, the relationships between budget deficit, current account deficit and economic growth variables were analyzed with ARDL cointegration, Granger causality and regression methods. It is seen that there are parallels between the results of the analysis and the previously obtained results in the literature. According to these results, it is seen that there is a long-term deficit, two-way negative relations between current account deficit and growth.