The analysis of capital movements in the framework of current account deficit in Turkey

In this study, the relationship between the current account and the capital movements in Turkey has been dealt with. In order to test this relationship, the VAR modelling methot have been used and the results of this analysis have been explained. According to findings of this econometric study, it is observes in Turkey?s economy that from 1992 to 2007 economic growth, current account deficit, interest difference which is described as the difference between the interest rate of interbank market and LIBOR, real exchange rate, short term capital flows, portfolio investment, direct investment and in executed VAR model during increasing current account deficit capital flows show a rising tendency.