DO GOVERNMENT EXPENDITURES AND TRADE DEFICITS AFFECT EACH OTHER IN THE SAME WAY? EVIDENCE FROM TURKEY
The purpose of this study is to determine the causality between trade deficits and government expenditure for the Turkish economy in different time horizons and in the case of different shock types between year 1987 and 2014. By doing so, we aim to understand whether the twin deficit hypothesis is v...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics and Business in Osijek
2017-01-01
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| Series: | Ekonomski Vjesnik |
| Subjects: | |
| Online Access: | http://hrcak.srce.hr/file/270703 |
| _version_ | 1797334872206868480 |
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| author | Tayfur Bayat Izzet Tasar Selim Kayhan Yunus Acci |
| author_facet | Tayfur Bayat Izzet Tasar Selim Kayhan Yunus Acci |
| author_sort | Tayfur Bayat |
| collection | DOAJ |
| description | The purpose of this study is to determine the causality between trade deficits and government expenditure for the Turkish economy in different time horizons and in the case of different shock types between year 1987 and 2014. By doing so, we aim to understand whether the twin deficit hypothesis is valid in the Turkish economy or whether government expenditures have more ability to cause the movements of trade deficit. To do this, we employ asymmetric causality test developed by Hatemi-J (2012) and Hatemi-J and Roca (2014) and rolling windows causality test developed by Balcilar et al. (2010) methods. Results obtained from all tests imply that there is a bi-directional causality between variables. Different from other causality analysis, asymmetric causality analysis results indicate that an increase in government expenditures reduces trade deficit contrarily to existing literature. This means twin divergence hypothesis might be valid in the Turkish economy instead of twin deficit hypothesis. |
| first_indexed | 2024-03-08T08:28:32Z |
| format | Article |
| id | doaj.art-8ce02decf20340b18605947b08733bc8 |
| institution | Directory Open Access Journal |
| issn | 0353-359X 1847-2206 |
| language | English |
| last_indexed | 2024-03-08T08:28:32Z |
| publishDate | 2017-01-01 |
| publisher | Faculty of Economics and Business in Osijek |
| record_format | Article |
| series | Ekonomski Vjesnik |
| spelling | doaj.art-8ce02decf20340b18605947b08733bc82024-02-02T04:12:19ZengFaculty of Economics and Business in OsijekEkonomski Vjesnik0353-359X1847-22062017-01-01301169180DO GOVERNMENT EXPENDITURES AND TRADE DEFICITS AFFECT EACH OTHER IN THE SAME WAY? EVIDENCE FROM TURKEYTayfur Bayat0Izzet Tasar1Selim Kayhan2Yunus Acci3İnönü University, Faculty of Economics, Malatya, TurkeyFırat University, Faculty of Economics, Elazig, TurkeyNecmettin Erbakan University, Faculty of Economics, Konya, TurkeySirnak University, Faculty of Economics, Sirnak, TurkeyThe purpose of this study is to determine the causality between trade deficits and government expenditure for the Turkish economy in different time horizons and in the case of different shock types between year 1987 and 2014. By doing so, we aim to understand whether the twin deficit hypothesis is valid in the Turkish economy or whether government expenditures have more ability to cause the movements of trade deficit. To do this, we employ asymmetric causality test developed by Hatemi-J (2012) and Hatemi-J and Roca (2014) and rolling windows causality test developed by Balcilar et al. (2010) methods. Results obtained from all tests imply that there is a bi-directional causality between variables. Different from other causality analysis, asymmetric causality analysis results indicate that an increase in government expenditures reduces trade deficit contrarily to existing literature. This means twin divergence hypothesis might be valid in the Turkish economy instead of twin deficit hypothesis.http://hrcak.srce.hr/file/270703Asymmetric causalitygovernment expenditurestrade deficittwin divergence hypothesis |
| spellingShingle | Tayfur Bayat Izzet Tasar Selim Kayhan Yunus Acci DO GOVERNMENT EXPENDITURES AND TRADE DEFICITS AFFECT EACH OTHER IN THE SAME WAY? EVIDENCE FROM TURKEY Ekonomski Vjesnik Asymmetric causality government expenditures trade deficit twin divergence hypothesis |
| title | DO GOVERNMENT EXPENDITURES AND TRADE DEFICITS AFFECT EACH OTHER IN THE SAME WAY? EVIDENCE FROM TURKEY |
| title_full | DO GOVERNMENT EXPENDITURES AND TRADE DEFICITS AFFECT EACH OTHER IN THE SAME WAY? EVIDENCE FROM TURKEY |
| title_fullStr | DO GOVERNMENT EXPENDITURES AND TRADE DEFICITS AFFECT EACH OTHER IN THE SAME WAY? EVIDENCE FROM TURKEY |
| title_full_unstemmed | DO GOVERNMENT EXPENDITURES AND TRADE DEFICITS AFFECT EACH OTHER IN THE SAME WAY? EVIDENCE FROM TURKEY |
| title_short | DO GOVERNMENT EXPENDITURES AND TRADE DEFICITS AFFECT EACH OTHER IN THE SAME WAY? EVIDENCE FROM TURKEY |
| title_sort | do government expenditures and trade deficits affect each other in the same way evidence from turkey |
| topic | Asymmetric causality government expenditures trade deficit twin divergence hypothesis |
| url | http://hrcak.srce.hr/file/270703 |
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