THE RELATIONSHIP BETWEEN ENERGY IMPORT AND CURRENT ACCOUNT DEFICIT: THE CASE OF TURKEY

In recent years, the main macroeconomic problem of Turkey is current deficits. In order to realize sustainable growth, the balance of payment should be kept under control. This control system is directly depends on minimization of current deficits. One of the main reasons of Turkey’s current account deficits is energy imports. By applying the Johansen co-integrated analysis, this paper aims to identify the relationship between current account deficits, energy consumption and economic growth by using the data set between the years 1980-2012 with reference to VAR (Vector Auto Regression). Furthermore, impulse response analysis and variance decompositions had been applied to the variables. According to the results of the analysis, we reached that there is a strong relationship between energy consumption and current account deficits.