Quadruplet deficits analysis for Turkey and PIIGS (Portugal, Italy, Ireland, Greece, Spain)

With the 2008 Global Crisis, the distinction between center and peripheral countries within the European Union has gained sharper lines. In this distinction, the five countries most affected by the crisis and drawing attention were Portugal, Ireland, Italy, Greece and Spain. On the macro economic indicators in post-crisis period, Turkey has demonstrated a parallel structure with the PIIGS countries. In this context, the main purpose of the study is; Testing the hypothesis of quadruplets deficit in the PIIGS countries and Turkey and to set forth the results. Keynesian and Ricardian views in the literature show different approaches to the balances of economies. While the Keynesian view asserts that the budget deficit is related to the current account deficit, Ricardian view related on the saving deficit. In the current literature on the subject, there is also research indicating that different determinants for the current account deficit are investigated. The output gap, which we consider as a fourth type of deficit with current account deficits, budget deficit and savings gap in our study, is generally the subject of analyzes on its role in the relationship between unemployment and / or inflation. Based on related literature, to investigate whether or not mentioned the effects of budget deficit, savings deficit and output deficit on current account deficit, used data from 1986 to 2018. After descriptive analyzes were performed according to the obtained panel data, the relationship between the variables was tested with the cointegration test and then long-term coefficients are estimated using the Prais-Winsten model. In the long run, the results have clearly confirmed the relationship between the current account deficit and the saving deficit. But; the coefficients were not significant in the relationship between budget deficit and output deficit to current account deficit. In the light this results, quadruplet deficits hypotesis for the PIIGS countries and Turkey is invalid. Key Words: Twins Deficits, Triplet Deficits, Quadrouplet Deficits, Unbalanced Panel Data Analysis