Econometric Analysis Of Budget Deficits Determinants: Example of Turkey (2006-2015)

The aim of this study is to reveal the effects of budget deficits in 2006-2015 on growth, inflation, employment, unemployment and foreign exchange deficits through econometric analyzes. In the study, the stability of the series is examined with the ADF unit root test and stagnation can be achieved in budget deficits, growth and inflation , but not in employment, unemployment and exchange rate. For this reason, budget deficits continue to be driven by growth and inflation. After stabilization, the Johansen cointegration test is used to investigate the cointegration relationship between budget deficits and growth and inflation. According to the results obtained, cointegration relation between budget deficits and growth and inflation was found. An error correction model (VECM) has been applied in order to find the causality relation due to the cointegration relation. According to the results of the amprical application; Long-term relationship between budget deficits and inflation was bi-directional, while budget deficits and growth were growing without one-way causality relation to budget deficits.