Unemployment and triple deficits

Unemployment is one of the macroeconomic problems faced by many countries around the world. Therefore, it is a serious economic problem of great importance. Unemployment, although it is effective in different dimensions in each country according to the level of development, becomes a structural problem over time, especially in developing countries such as Turkey. The distortions in the savings-investment balance, the budget balance and the current account balance, which represent the internal and external balance in the economy, bring along different economic problems. Therefore, the relationship between unemployment, which is increasing day by day in the world, and the components that make up the triple deficit, is being wondered. The aim of this study is to examine the relationship of unemployment, which is one of the important indicators of macroeconomic instability, with the savings deficit, budget deficit and current account deficit, which form triple deficit. For this purpose, the relationship between unemployment and triple deficit in Turkey has been estimated with the Structural VAR (SVAR) method using data covering the period 2000:1-2020:4. As a result of the analysis, it has been seen that the variable that affects unemployment the most is the current account deficit and the variable that affects the least is the budget deficit variable. In addition, it was concluded that the savings gap variable and the exchange rate variable, which is the control variable in the model, reduce unemployment.