ISSN: 1648 - 4460

International Journal of Scholarly Papers


Transformations  in
Business & Economics

Transformations in
Business & Economics

  • © Vilnius University, 2002-2009
  • © Brno University of Technology, 2002-2009
  • © University of Latvia, 2002-2009
Balance of Payments Constrained Growth in Turkey: Evidence from ARDL Bound Testing Approach
Ali Acaravci, Ilhan Ozturk

ABSTRACT. The aim of this study is to empirically test the validity of Thirlwall’s Law in Turkey during the period of 1980:1-2006:4 using an Autoregressive Distributed Lag (ARDL) Bounds testing approach. The empirical results reveal that import is cointegrated with relative price and income. The estimates of the long run elasticities from this function are used to compute the equilibrium growth rate. The difference between the equilibrium and actual economic growth rates are small. Nevertheless, results from regressions of equilibrium growth rates indicate that the Thirlwall’s law does not hold for Turkey.

KEYWORDS: growth, balance of payments, Thirlwall’s Law, ARDL, Bound Test, Turkey.

JEL classification: C32, E12, F14, F43.

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Scholarly papers Transformations in Business & Economics
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