Abstract:

In this study, the relationship between current account deficit and unemployment, real exchange rate and crude oil prices was examined in the period between 2003 and 2017, benefiting from the VAR methodology and technical integration and co-operation. For this purpose, stability of variables was investigated by ADF and PP tests. Then, the long-term relationship between the variables was investigated by Johansen co-integration method and it was seen that there was a co-integration relationship between the variables in the long-term. The VECM model was used instead of the VAR model as a result of the variables moving together in the long term. As a result of the VECM analysis, the current account balance is affected in the short term when there is a change in oil prices. A change in the current account balance and oil prices has an effect on unemployment. In the period we discussed, it is observed that 1 unit change in unemployment, real effective exchange rate and crude oil independent variables has 26-period effect in current balance. In other words, it is seen that the 1-unit change in the independent variables brings the balance of balance to balance at the end of 26 terms.

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