RELATIONSHIP BETWEEN PUBLIC EXPENDITURE AND FOREIGN TRADE DEFICITS: THE CASE OF TURKEY
Journal Title: Kastamonu Üniversitesi İktisadi ve İdari Bilimler Fakültesi Dergisi - Year 2017, Vol 19, Issue 4
Abstract
Foreign trade deficits constitute an important problem in Turkey. It is argued that foreign trade deficits may be caused by different variables. But the extensive majority show public spending as a result of foreign trade deficits. There is in theory, two different views on this subject; the Keynesian Approach and Ricardian Equity Hypothesis. This study will be tested with econometric methods to determine whether there is a relationship between foreign trade deficits and public expenditures. In this respect, the relationship between public expenditures and foreign trade deficits in the Turkish economy of 1965-2015 periods has been examined by examining structural breaks and long-term relationships. The findings show the existence of a relationship between public spending and foreign trade deficits in the long run and it supports Keynesian approach.
Authors and Affiliations
Aylin İDİKUT ÖZPENÇE, Eren ERGEN
Keywords
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- EP ID EP265245
- DOI 10.21180/kuiibf.2017434560
- Views 122
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