Original scientific paper

https://doi.org/10.32728/ric.2017.32/2

DOES COUNTRY CREDIT RATING AFFECT CURRENT DEFICIT ACCOUNT: THE CASE OF TURKEY (1992-2014)

Ahmet Gulmez ; Department of Economics, Sakarya University, 54100, Turkey
Furkan Besel orcid.org/0000-0002-5930-9200 ; Department of Public Finance, Sakarya University, 54100, Turkey
Fatih Yardimcioglu ; Department of Public Finance, Sakarya University, 54100, Turkey

Abstract

In this study the presence and direction of the relationship between the current account deficit and credit rating index for Turkey has been tested using Gregory-Hansen co-integration test, which considers structural breaks and Toda-Yamamoto causality analysis for the period of 1992-2014. Based on the results of empirical applications, it has been concluded that both series are not stable and there is a long-term relationship between the variables. As a result of the Toda-Yamamoto method based on the Granger causality analysis, it has been determined that there is a one-way causal relationship between the variables from current account deficit towards credit rating index.

Keywords

Account deficit; Credit rating; Gregory-Hansen co-integration test; Toda-Yamamoto causality analysis

Hrčak ID:

185325

URI

https://hrcak.srce.hr/185325

Publication date:

28.7.2017.

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