QUADRUPLE DEFICITS HYPOTHESIS IN ECONOMICS LITERATURE AND A STUDY ON ECONOMICS OF TURKEY

Abstract

The “quadruple deficit hypothesis”, which is one of the recent discussion topics, is a new theory developed on the effects of the relations between output (balance) deficit, investment- savings, public budget and current account deficit (balance) on the economy. Although there is extensive literature on “twin deficits” and “triple deficits” in the literature of literature, there has not been enough study in the context of quadruple deficits and their effects on the economy. This is the reason that this works in terms of quadruplets hypothesis to explain Turkey's economy in recent years through the selected data will be made an empirical examination. The econometric methodology applied in the study consists of three parts. In the first part; Stability levels of the series are carried out using Lee-Strazicich unit root test with structural break. Secondly; The existence of a cointegration relationship between variables is determined within the framework of the ARDL boundary test. Finally, the existence and direction of causality between variables is investigated by Toda-Yamamoto causality analysis. In the conclusion part, the empirical findings are interpreted in the light of the macroeconomic data obtained.