Government expenditures and trade deficits in Turkey: Time domain and frequency domain analyses


Kayhan S., BAYAT T., YÜZBAŞI B.

ECONOMIC MODELLING, vol.35, pp.153-158, 2013 (Journal Indexed in SSCI) identifier identifier

  • Publication Type: Article / Article
  • Volume: 35
  • Publication Date: 2013
  • Doi Number: 10.1016/j.econmod.2013.06.022
  • Title of Journal : ECONOMIC MODELLING
  • Page Numbers: pp.153-158

Abstract

The purpose of this study is to determine the causality between trade deficit and government expenditures in the Turkish economy. We employ bootstrap process-based Toda-Yamamoto causality and frequency domain analysis methods. Results obtained from both methods imply that there is a bi-directional causality between trade deficits and government expenditures. Different from Toda-Yamamoto causality analysis, frequency domain causality analysis indicates that the causality running from government expenditures to trade deficits exists in the short and medium terms while causality runs from trade deficits to government expenditures in the short and long runs. (C) 2013 Elsevier B.V. All rights reserved.