Triple Deficit in Turkish Economy

Triple deficit is an economic situation in which saving investment deficits and budget deficits accompany current deficits. This paper empirically investigates the validity of triple deficit hypothesis for Turkish economy by the use of time series related to 2004: 1-2014: 3 periods. For this purpose, bound test, ARDL analysis and Toda-Yamamoto Causality analysis are applied. Bound test results indicate a long run cointegration relationship between current deficits, saving investment deficits and budget deficits. The findings of the ARDL analysis demonstrate that budget deficits and saving investment deficits increase current deficits in the long run. Moreover, it is detected that increasing effects of budget deficits on current deficits are valid for the short run. According to the Toda-Yamamoto causality analysis results there are bidirectional causality relationship between budget deficits and current deficits; budget deficits and saving investment deficits; current deficits and saving investment deficits.