Validity of the triple deficit hypothesis in Türkiye

The budget deficit and current account deficit components, which have marked the Türkiye economy since the 1980s and have been the subject of many researchers, have been defined as the twin deficit hypothesis in the literature. While some researchers and scholars have argued that the twin deficit hypothesis is valid for Türkiye, others have argued that the twin deficit hypothesis is not valid. While the validity of the deficit continues to be debated, a new component has been introduced and taken its place in the literature. A new concept, the investment-savings deficit, was added to the budget deficit and current account deficit components of the twin deficit hypothesis and the triple deficit hypothesis was put forward. The aim of this study is to test whether the triple deficit hypothesis is valid or not in Türkiye with the help of econometric analysis using data for the years 2000-2023. The study is supported by stationarity tests, unit root tests, ARDL model and error correction models. According to the findings, it is concluded that the twin deficit hypothesis is valid while the triple deficit hypothesis is not valid between 2000 and 2023 in Türkiye.