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Foreign Trade Deficit Sustainability of Turkey

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  • Burak Güris
  • Burcu Kiran

Abstract

This paper examines whether the foreign trade deficit of Turkey is sustainable or not by using three-regime threshold autoregressive unit root test of Kapetanious and Shin (2006). Three models are estimated including linear OLS, two-regime self-exciting threshold autoregressive and three-regime self-exciting threshold autoregressive models. The three-regime threshold autoregressive model is chosen as appropriate model for foreign trade deficit of Turkey by employing sup-Wald test. The finding results of the three-regime threshold autoregressive unit root test indicate that Turkey’s foreign trade deficit is not sustainable.

Suggested Citation

  • Burak Güris & Burcu Kiran, 2011. "Foreign Trade Deficit Sustainability of Turkey," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 167-174.
    • Handle: RePEc:bas:econst:y:2011:i:1:p:167-174
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F10 - International Economics - - Trade - - - General

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