Determi̇nants of current account balance in Turkey

Balance of payment defined as a statistical reports summarizing the transaction between non-residents with residents in a certain period of time. Balance of Payments consist of current account, capital and financial accounts, reserve assets, net errors and omissions. Current account is the most important account in the balance of payments. Total expenditure, investment saving balance and flexibility which from arising the first theoretical approaches to determinants of current account balance are very simple and macroeconomic theory. Mundell Fleming model, Monetarist approach, the portfolio balance and intertemporal optimization approach which emerged in the period of the time while the liberalization and increased of importance capital flow are based on microeconomic theory that notice expectations and decisions of person and institution. In recent years, increasing current account deficit in Turkey is allegedly caused by economic growth, savings deficit, budget deficit, the rise in the real exchange rate, the increase in investment, the dependence on foreign energy and foreign borrowing. On the other hand, monetary and fiscal policies applied are insufficient to reduce the current account deficit.