Current accounts

We analyze the global imbalances and the required adjustments for rebalancing in current accounts and real exchange rates. We set up a two-country two-sector model for the US-China with two asymmetries. First, we assume that the size of China initially is one third of the US but its size becomes half of the US in the next ten years consistent with the fast growth expectations in China. Secondly, we assume that China initially runs a net export surplus against the US. Then we quantitatively study two adjustment scenarios. First scenario, called Slow Adjustment, assumes that in the process of growth, Chinese demand composition moves more towards domestic non-tradable sector. In this case, Chinese real exchange rate appreciates gradually and net export surplus also decreases slowly. Second scenario, called Quick Adjustment, assumes that in addition to the higher non-tradable share in output, net export surplus against US goes to zero quickly in …ve years. In this case, net export adjustment happens quickly and real exchange rates in China also appreciate faster and at a higher rate than Slow Adjustment case. Even though, global imbalances are eliminated faster in the Quick Adjustment case, high real appreciation in China hurts importers in the US. A comparison in terms of output shows that Slow Adjustments is preferred for both countries.

This paper investigates the asymmetric effects of real exchange rate movements on the current account balance in
Turkey, from 2002:01 to 2019:09, using by non linear autoregressive distributive lag (NARDL) model proposed
by Shin et. al. (2014). This method enables us to examine an asymmetric relationship between real exchange rateand current account balance. The empirical findings point out that there is asymmetric cointegration between exchange rate and current account in Turkey. In the long run, positive and negative changes in real effective exchange rate exert a significant negative effect on current account.

One of the most important economic targets especially for the developing countries is to minimize the deficits in the Balance of Payments and Current Account Balance. Countries try to cover the Current Account deficit generally by the help of tourism, which is part of the Services Account of the Balance of Payments.
Tourism has some economic contributions especially for some developing countries like creating employment, supporting other sectors, firing investments and attracting foreign assets. Tourism sector, which has a great importance for Turkish economy, has become one of the strongest foreign exchange earner sectors, thanks to the developing targets and policies along with the regulations effective since the beginning of 1980s. On the other
hand, as this growth has occurred fast and unplanned, the sector could not have strong groundwork. In order to make Turkish tourism more effective in reducing the current account deficit, international tourist arrivals, tourism receipts and tourist expenditure per tourist have to be increased. For this goal, there are lots to do, like diversifying tourism, making tourism season longer, strengthening the sector, maintaining sustainable tourism
development by following latest trends, etc.
Key words: Balance of Payments, Current Account Balance, Turkey, Tourism, Tourism Receipts

Strong domestic demand, low levels of private savings, high share of energy imports in total imports, import dependence of exports make current account deficit a structural problem for Turkey. Norm current account balance adds a new dimension to sustainability debate which has gained popularity in recent years.
Norm current account balance represents the estimated structural balance, when permanent changes are effective in the main determinants of the current account, at potential output level. From this point forth, norm reflects the current account balance, which is implied by the main determinants of current account in the medium-long term outlook.
There are two main methods for norm estimations. Using econometric analysis techniques and focusing on relationship between current account balance and main determinants, macroeconomic balance approach is the first one between these two methods. In external sustainability approach, which is a more intuitive method, norm balance defined as current account position that would stabilize the net foreign asset position at given “benchmark” level.
In this study, both approaches adopted to estimate norm current account deficit for Turkey. With this purpose, panel data analysis and regression analysis techniques were used for calculations. As a result, norm current account deficit to GDP ratio was estimated around 4 percent for Turkey with these two approaches. In addition, the necessity of focusing long-term solutions rather than short-term for current account deficit was emphasized by scrutinizing which of these main determinants affect this equilibrium level and structural reforms required for solving this problem in the long-run was stated.
Key Words: Norm Current Account Balance, Macroeconomic Balance Approach, External Sustainability Approach, Panel Data Analysis, Regression Analysis

This paper seeks to evaluate quantitatively how interbank and corporate crossborder flows shape business cycles in a monetary union. Using Bayesian techniques, we estimate a two-country DSGE model that distinguishes between Eurozone core and peripheral countries and accounts for national heterogeneities and a set of real, nominal and financial frictions. We find evidence of the key role of this
cross-border channel as an amplifying mechanism in the diffusion of asymmetric shocks. Our model also reveals that under banking globalization, most national variables and the central bank interest rate are less sensitive to financial shocks while investment and current account imbalances are more sensitive to financial shocks. Finally, a counterfactual analysis shows that cross-border lending has
affected the transmission of the recent financial crisis between the two groups of countries.

Indian Rupee depreciated gradually against the US Dollar ever since the reforms initiated in 1991. However the rupee faced a record fall of about24% from May 2013 to August 2013. So why it is that Indian rupee has fallen so fast against dollar? Has the international monetary cooperation broken down? Under this backdrop, this paper talks about the dynamics of the rupee in the global environment and attempts to analyze the probable reasons behind long term fall of rupee. This paper considers the post-reforms period for analysis.

In the literature, beside the view stating that financial development which gained momentum in recent years has an impact on current deficit, the increase occurring in current deficit provide contribution to the financial development by increasing demand to financial instruments. The main objective of the work in this direction is; the detection of the causality between financial development and the current account deficit and if later on to determine the effects of the causality. Therefore, for 24 OECD country the direction of current deficit and financial development between the years 1995-2012 has been determined with the Dumitrescu-Hurlin panel causality test, short-term coefficients related to the factors on the model formed towards the acquired model have been calculated by Feasible Generalized Least Squares (FGLS) method. As a result of analysis, we did not find impact of the current account deficit on financial development; but negative effect of the financial development to the current account deficit has been found.

The current account imbalances that are at the heart of the European sovereign debt crisis are often attributed to differences in price competitiveness. However, recent research suggests that domestic demand booms related to the financial cycle may have been more important. As this would have very different policy implications, this paper aims to investigate the relative role of price competitiveness and domestic demand as drivers of the current account imbalances in the euro area. We estimate panel error-correction models for exports, imports and the trade balance. We specifically look at fluctuations in domestic demand at the frequency of the financial cycle. We conclude that although differences in price competitiveness have an influence, differences in domestic demand are more important than is often realized. Fluctuations at the frequency of the financial cycle are more suitable to explain the trade balance than fluctuations at the frequency of the normal business cycle. Our results call for more emphasis on credit growth and macro prudential policy, in addition to the current attention for competitiveness and structural reforms.

Bu çalışma gelişmekte olan ülkelerde cari işlemler dengesi ile ekonomik büyüme arasındaki uzun dönem nedensellik ilişkisini incelemektedir. Bu çerçevede çalışmada gelişmekte olan 10 ülkenin 1981-2010 dönemi verilerinden hareketle cari işlemler dengesi ile ekonomik büyüme arasındaki ilişkisi diğer çalışmalardan farklı olarak Pedroni (1999) Panel Eşbütünleşme ve Panel Vektör Hata Düzeltme Modelleri (Panel VECM) ile test edilmiştir. Analiz sonuçları, ele alınan ülkelerde seriler arasında uzun dönemli bir eşbütünleşme ilişkisi olduğuna işaret ederken uzun dönemde cari işlemlerden ekonomik büyümeye doğru pozitif ve ekonomik büyümeden cari işlemlere doğru negatif bir nedensellik ilişkisi olduğunu göstermektedir. Abstract This study investigates the short term causality relations between current account balance and economic growth in developing countries. For this purpose, in contrast to other studies, this study examines the causality relations of 10 1 Maliye Dergisi  Sayı 164 Ocak-Haziran 2013 221 developing countries with Pedroni Panel Cointegration Analysis (1999) and Panel Vector Error Correction Models (Panel VECM) for the data period of 1981-2010.

In the study, the relationship between credit volume and current account deficit was tested with the ARDL bounds test method after the unit root with Lee-Strazich break for the 1998:1Q-2020:4Q period. According to the results, there is a cointegration and causality relationship between the increase in credit volume and the current account deficit, and the increase in the credit volume plays a role in increasing the current account deficit. Based on the long-term estimates of the empirical analysis, a 1% unit increase in the loan volume increases the current account deficit by 0.061%. Under the assumptions that many macroeconomic indicators affecting the current account deficit are stable (ceteris paribus), econometric analysis results are in line with theoretical expectations and support the thesis that the increase in credit volume increases the current account deficit. According to the results obtained, the 1% unit increase in the loans extended has a lower impact on the current account deficit (0.061). According to the error correction results obtained, short-term deviations in the series that move together in the long-term reach equilibrium in 3 periods.

This study investigates the relationship between current account deficit and oil prices in Turkey over the period from 1976 to 2016 by utilizing the Zivot-Andrews Unit Root Test, Gregory-Hansen Cointegration Test, Toda-Yamamoto Causality Test methods. The tests indicate that both variables are stationary when their first differences are taken. According to cointegration test results there is a long run relationship between the current account deficit and oil prices in Turkey. The results of Toda-Yamamoto Causality Test indicate that there is unidirectional causality from oil prices to current account deficit.

Özet:
Cari işlemler açığı, finansman imkânları vs. gibi ölçütlerden bağımsız olarak başlı başına önemli bir kırılganlık göstergesidir. Türkiye’de cari açık, hem finansman kalitesinin pek çok kritere göre düşük olması, hem de dış ticaret yapısındaki derin dengesizliklere dayanması nedeniyle ayrıca kaygı vericidir. Bu makale çeşitli veriler, ampirik çalışmalar ve teorik çerçeveye dayanarak, cari açığın Türkiye açısından neden önemli bir problem olduğunu açıklamayı amaçlamaktadır.

This study investigates the current account deficit (CAD) of Turkey from the perspective of its capital account. We discuss how global liquidity conditions and monetary policies in Turkey have contributed to higher deficits through real exchange rate appreciations. We analyze the impact and consequences of exchange rate (ER) changes on the investments of non-financial firms. In the case of real ER depreciations, we find that the magnitude of the contractionary effect through balance sheets of firms with dollarized liabilities is significantly higher than the expansionary effect through trade competitiveness. We also analyze the " soft-landing " policies aimed at reducing the CAD in Turkey and estimate the rate of economic growth that must be foregone for a percentage reduction in CAD.

Kaynak transferi fonksiyonunu icra eden katılım bankalarının fon toplama araçları katılma hesapları ve özel cari hesaplardır. Katılma hesaplarına kar veya zarardan paylaşım oranına göre tahakkuk gerçekleştiren katılım bankaları için özel cari hesapları maliyetsiz kaynak olarak değerlendirilir. Katılım bankalarının performanslarını modelleyen çalışmalarda katılım fonları değişken olarak yer almaktadır. Ancak katılım fonlarının cüzlerine ayrılması ve özel cari hesapların değişken olarak kullanımı yaygın değildir. Bu çalışmada katılım bankalarının performanslarının ölçülmesine yönelik kullanılabilecek değişkenlere ilişkin değerlendirmelere yer verilmiştir. Bu çalışmanın bulguları ileride gerçekleştirilecek olan performans çalışmalara için kaynak oluşturmaktadır.

Participation banks collect participation funds for credit allocation by participation accounts and special current accounts as main function. Profit or loss offered to participation accounts on base of participation share ratio while special current accounts are considered as cost-free resources. Participation funds are used in the models that analyze participation banks' performance. Although participation fund types are not considered as variables also special current accounts. This research brings suggestions for the variables for performance analysis of participation banks for further researches.

Exploring the determinants and dynamics of the current account balance is one of the priorities of academic literature and policy circles. Although the effects of structural variables are deeply analyzed, a lesser attention has been paid to the impact of financial variables. Drawing on standard empirical current account models and with a large sample of industrial and developing countries, we report a significant deterioration in the current account balance in case of an increase in the credit growth. Moreover, we find that this link is substantially stronger for the developing ones motivating a closer examination. Therefore, we further advance our analysis and show that credit growth causes a stronger impact on the current account balance for lower levels of financial depth. In other words, at the early stages of financial development, acceleration in the credit growth might cause a larger deterioration in the current account balance; thus, it might be suggested that monetary policy and macro-prudential measures aimed at preventing financial excess might be more effective to reduce the external imbalances at the early stages of financial deepening.

In the past three decades, the Islamic banking industry has gained a cumulative growth momentum given the growing demand for Shari‘ah compliant financial services. Islamic banking has now achieved greater recognition as a viable alternative to conventional banking; as depicted by various substantial data citing the continuous growth of its deposits globally. The majority of Islamic banks have also benefitted from the profit distribution mechanism that has considerably improved over time.
However, amidst this growth, there has been growing need for research and further development on numerous practical aspects and areas of Islamic banking. This includes the important issue of profit calculation and its distribution between the Mudarib and Arbab al Mal which follows the lengthy smoothening process of applying weightages, creating reserves, giving hiba and allocating the expenses & cost of the fund between the Mudarib and Rabb al Mal. This paper, therefore, aims to explore different practices and suggest further improvements to be practiced by Islamic banks.

This paper attempts to examine the relationship between current accountbalance and Nominal Exchange rate (J-Curve phenomenon ) for India .Current Accountbalance is the great interest because it is the part of Balance of Payment ( trade balance) and varies with respect to the number of factors but in this paper my focus is only atthe nominal exchange rate. In this paper we will see the effectiveness of devaluationof currency or increment of Exchange rate lead to the J –curve phenomenon or not .Toestimate the relationship I have collected the data from 1980 to 2010 (31 observations). I think that it is insufficient data to estimate the Long term relationship but we willtry to work on this data to find the appropriate relationship. Indian current account been deficit from the long time , there was the surplus only for few years like 2001-2004 .The reason behind this may be huge imports or more government expenditurethan collected taxes . But Indian GDP is keep on growing with time .

Using the IMF CGER methodology, we make an assessment of the current account and price competitiveness of the Central Eastern European Countries (CEEC) that joined the EU between 2004 and 2014. We present results for the “Macroeconomic Balance (MB)” approach, which provides a measure of current account (CA) equilibrium based on its determinants together with misalignments in real effective exchange rates (REERs). We believe that a more refined analysis of the misalignments may useful for the Macroeconomic Imbalance Procedure (MIP). This is especially the case for these countries, which have gone through a transition phase and boom/bust periods since their independence. Because such a history may have influenced a country’s performance, any evaluation must take account of each country’s particular characteristics. We use a panel setup of 11 EU new member states (incl. Croatia) for the period 1994–2012 in static and dynamic frameworks, also controlling for the presence of cross-sectional dependence and checking specifically for the role of exchange rate regimes, capital flows and global factors. We find that the estimated coefficients of the determinants meet with expectations. Moreover, the foreign capital flows, the oil balance, and relative output growth seem to play a crucial role in explaining the current account balance. Some global factors such as shocks in oil prices or supply might have played a role in worsening the current account balances of the CEECs. Having a pegged exchange rate regime (or being part of the euro zone) affects the current account positively. The real effective exchange rates behave in accord with the current account gaps, which clearly display cyclical behaviour. The CAs and REERs come close to
equilibria in 2012 in most of the countries and the rebalancing is completed for some countries that were less misaligned in the past, such as Poland and Czech Republic, but also for Lithuania. When Foreign Direct Investment (FDI) is introduced as a determinant for these countries, the misalignments are larger in the boom periods (positive misalignments) whereas the negative misalignments are smaller in magnitude.

Financial capability has recently emerged as a strategic policy objective that complements the financial inclusion and financial consumer protection agendas. Deeper and more inclusive financial markets require better informed and more confident consumers, a financial infrastructure that promotes easy access to high quality financial services and their active use, and financial consumer protection mechanisms that effectively address the risks to consumers. In 2012, in order to promote financial capability around the world, G20 Leaders endorsed the High-level Principles on National Strategies for Financial Education developed by the OECD/INFE. According to an OECD study, among the countries that designed and adopted their national strategies for financial education, 80 percent have used financial capability surveys to identify the key priorities for policy intervention. A broad variety of survey methodologies have been developed to support policy making and research in the areas of fi...

La restricción externa es un tema clave de la macroeconomía argentina en tanto el proceso de desarrollo se ve recurrentemente limitado por el faltante de divisas que detiene la expansión del producto. Si bien varios factores explican la persistencia de esta problemática, en este trabajo consideramos como su causal central a las limitaciones con las que opera el sistema industrial en Argentina. A este respecto, los enfoques que abogan por un activo papel estatal, a diferencia de los tradicionales enfoques de ajuste automático de mercado, sostienen que robustecer y complejizar la matriz productiva constituye la clave para superar las crisis de balanza de pagos. Para esto, resulta necesario impulsar el crecimiento de ciertos sectores productivos (especialmente aquellos intensivos en conocimiento) y acentuar el desarrollo tecnológico fronteras adentro en un marco institucional acorde, tal como lo suscriben los economistas estructuralistas y el enfoque de los Sistemas Nacionales de Innovación. Tomando estas conceptualizaciones teóricas y la evidencia empírica que da cuenta de los comportamientos cíclicos en las últimas décadas, particularmente la evolución histórica de la balanza comercial de bienes de la cuenta corriente argentina, tipificada por contenido tecnológico, concluimos que las crisis recurrentes del sector externo argentino se deben a la falta de una industria diversificada y de alta productividad.

This paper investigates the hypothesis of twin deficits in Morocco. According to this theoretical concept, the budget deficit is the main cause of the current account deficit. The Empirical results obtained from the impulse responses analysis of the VAR model and the Granger-causality test indicate the existence of an unidirectional causality going from the current account deficit to the fiscal deficit. This implies the existence of reverse causality i.e. the current account deterioration is the main cause of the fiscal deficit in Morocco.

"One of the most important economic targets especially for the developing countries is to minimize the deficits in the Balance of Payments and Current Account Balance. Countries try to cover the Current Account deficit generally by the help of tourism, which is part of the Services Account of the Balance of Payments. Tourism has some economic contributions especially for some developing countries like creating employment, supporting other sectors, firing investments and attracting foreign assets. Tourism sector, which has a great importance for Turkish economy, has become one of the strongest foreign exchange earner sectors, thanks to the developing targets and policies along with the regulations effective since the beginning of 1980s. On the other hand, as this growth has occurred fast and unplanned, the sector could not have strong groundwork. In order to make Turkish tourism more effective in reducing the current account deficit, international tourist arrivals, tourism receipts and tourist expenditure per tourist have to be increased. For this goal, there are lots to do, like diversifying tourism, making tourism season longer, strengthening the sector, maintaining sustainable tourism development by following latest trends, etc.
Key Words : Balance of Payments, Current Account Balance, Turkey, Tourism, Tourism Receipts"

and numerous other Government ministries and agencies. We also thank representatives from the Federation of Malaysian Manufacturers, the American Malaysian Chamber of Commerce, the Japan External Trade Organization (JETRO), and analysts at several financial and rating institutions for helpful discussions. We are indebted to the International Cooperation Section of Economic Planning Unit for their ongoing collaboration with the World Bank and in particular their extensive support in the launch of this report.

Malta’s current account position has shifted dramatically in recent years, from one of the largest relative deficits in the euro area to one of the highest surpluses. Malta’s external accounts have improved since 2009 by about four times the change seen in the euro area. This article argues that cyclical demand factors did not cause this, while lower oil prices and a better real exchange rate played a minor part. Structural developments, such as improving energy intensity and falling import content, were more important drivers. The improvement in the current account reflects a recovery in the national saving rate, driven by better fiscal performance, and rising corporate and household savings due to higher activity among export-oriented services firms. Conversely investment has declined, as these firms rely more on human capital.

Since the late 1990s there have been substantial changes in the current account balances of a number of economies, most notably a marked widening in the current account deficit of the United States and increased net lending by many developing nations to developed economies. This paper uses panel data to examine what may have contributed to changes in the current account positions of a wide sample of developing and developed economies. In particular, we aim to assess the 'global saving glut' hypothesis that financial crises have contributed to the current account surpluses in developing economies. Overall, we find some support for this argument; there is a significant role for financial crises as well as institutional factors in determining current account balances. However, the model captures the broad trends evident in international capital flows for only some of the major regions in our sample. JEL Classification Numbers: F32, F41

Why have emerging market economies (EMEs) been stockpiling international reserves? We find that motives have varied over time-vulnerability to current account shocks was relatively important in the 1980s but, as EMEs have become more financially integrated, factors related to the magnitude of potential capital outflows have gained in importance. Reserve accumulation as a by-product of undervalued currencies has also become more important since the Asian crisis. Correspondingly, using quantile regressions, we find that the reason for holding reserves varies according to the country's position in the global reserves distribution. High reserve holders, who tend to be more financially integrated, are motivated by insurance against capital account rather than current account shocks, and are more sensitive to the cost of holding reserves than are low-reserve holders. Currency undervaluation is a significant determinant across the reserves distribution, albeit for different reasons. JEL Classification Numbers: E58, F15, F31, F43

This paper advances an alternative explanation of the large external imbalance between the United States and China, and its linkages to the current global financial crisis. We show that US current account deficits dated back long before the emergence of China's recent large trade surpluses, with China accounting at its peak for at most one-third of this deficit. The relative rise in China's savings in recent years can be attributed to an increase in its corporate savings, a trend which reflects distortions arising from the transition process from a planned to a market economy. These distortions exacerbate China's income inequality, causing domestic consumption to remain a small share of GDP. Large recent current account deficits in the United States, on the other hand, can be attributed to public sector dissavings and perverse incentives generated by housing and equity bubbles, made possible by loose monetary policy and by "innovative" financial derivatives arising from the financial deregulation in the early 1980s. The paper shows that short run measures are unlikely to fully address these external imbalances. Both countries require long run, structural measures to resolve the underlying problems and to restore a sustainable foundation for growth. 1 Paper prepared for the Edward Chen Distinguished Lecture delivered in Hong Kong University on November 9, 2009 by Justin Lin. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

This paper advances an alternative explanation of the large external imbalance between the United States and China, and its linkages to the current global financial crisis. We show that US current account deficits dated back long before the emergence of China's recent large trade surpluses, with China accounting at its peak for at most one-third of this deficit. The relative rise in China's savings in recent years can be attributed to an increase in its corporate savings, a trend which reflects distortions arising from the transition process from a planned to a market economy.

The increase in the interaction between the countries in the globalization process brought along searches for new paradigms in terms of socioeconomics and politics. One of the steps taken in this process is Developing Eight (D-8) Economic Cooperation Organization which led by Turkey. Within the scope of the study, the relationship between the current account balance and economic growth for D-8 countries is analyzed with structural breaks and causality tests. According to the findings obtained from the econometric analysis, the structural break dates in the D-8 countries are affected by the socioeconomic and political developments in the countries and the global crises. According to the causality analysis results; For Bangladesh, Malaysia and Pakistan, there is a causal relationship from current balance to economic growth. For other countries, no obvious relationship has been found. When these results are evaluated together, it is seen that the channels and coordination in which the member countries of D-8 can act together, whose population is close to 1.2 billion in total and capable of representing very wide geography, should be strengthened. Keywords: Current Account Balance, Economic Growth, Developing Eight (D-8).

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Küreselleşme sürecinde ülkeler arasındaki etkileşimin artması sosyoekonomik ve politik açıdan yeni paradigma arayışlarını beraberinde getirmektedir. Bu süreçte atılan adımlardan biri de Türkiye’nin öncülüğünü üstlendiği Gelişen Sekiz (D-8) Ekonomik İş Bilirliği Örgütüdür. Çalışma kapsamında D-8 ülkeleri için cari denge ile ekonomik büyüme arasındaki ilişki yapısal kırılmalar ve nedensellik testleriyle incelenmektedir. Yapılan ekonometrik analizlerden elde edilen bulgulara göre, D-8 ülkelerinde yapısal kırılma tarihleri ülkelerdeki sosyoekonomik ve politik gelişmelerden ve küresel krizlerden etkilenmektedir. Nedensellik analizi sonuçlarına göre; Bangladeş, Malezya ve Pakistan için cari dengeden ekonomik büyümeye doğru nedensellik ilişkisinin söz konusudur. Diğer ülkeler içinse herhangi bir belirgin ilişkiye rastlanılamamıştır. Bu sonuçlar bir arada değerlendirildiğinde, nüfusu toplamda 1,2 milyara yaklaşan ve oldukça geniş bir coğrafyayı temsil edebilme kabiliyetinde olan D-8’e üye ülkelerin birlikte hareket edebileceği mecraların ve koordinasyonun güçlendirilmesi gerektiği görülmektedir. Anahtar Kelimeler: Cari Denge, Ekonomik Büyüme, Gelişen Sekiz Ülke (D-8).

The recent global financial crisis has led to greater imbalance in both the external and the internal ac- count deficits of several countries including India. In this paper, the relationship between India’s government budget deficit and current account deficit during the period 1980-2012 is examinedThe results show that a cointregrating relationship exists between current account and fiscal balances, ex- change rate and real GDP. Existence of cointegration confirms beyond any doubt that the twin deficit hypothesis is very much relevant in the case of India.

Öz İkiz açıklar hipotezi, Türkiye gibi gelişmekte olan ülkelerde oldukça önemli bir konu olma özelliğindedir. Bütçe açıklarının cari açık ile birlikte hareket etmesi olarak tanımlanan ikiz açıklar hipotezi bu çalışmada Türkiye ekonomisi odaklı literatürden farklı olarak ABD merkez bankası (FED)'nın geleneksel olmayan para politikası ile etkileşim içerisinde araştırılmaktadır. Çalışmada iki aşamalı özgün bir yöntem kullanılarak, Türkiye ekonomisi için 2002Q1 ile 2018Q3 dönemleri arasında FED'in para politikası kararlarının özellikle kantitatif genişleme dönemlerinde ikiz açıkların uzun vadeli dengesinden kısa vadede sapmalara olan etkisini araştırmaktadır. Çalışmanın ilk aşamasında eş bütünleşme analizi yapılarak değişkenler arasındaki uzun vadeli ilişkiye ait tahmin yapılmaktadır. İkinci aşamada ise bu uzun vadeli ilişkiye kısa vadeli olarak kantitatif genişleme dönemlerinin etkisi analiz edilmektedir. Analiz sonucunda elde edilen bulgular, Türkiye ekonomisi için cari açıklar ve bütçe açığı ilişkisi için küresel şokların etkisinin önemli düzeyde olduğunu göstermektedir. Çalışmada FED'in para politikasının ikiz açıklar hipotezinin uzun vadeli dengesinden sapması açısından oldukça önemli olduğu sonucuna ulaşılmıştır.

This research work is focused on the damage caused to the economic growth by misappropriation in trade invoices. Pakistan's trade activities with the US and China are discussed. China is the major trading partner of Pakistan so the trade statistics with China are focused and are empirically tested and represented. The research results show that illegal trade practices are prevailing in Pakistan which is adversely affecting the economy of Pakistan. The trade record of past few years show that an amount of more than 1,500 million US dollars is under invoiced between Pakistan-China trade each year which critically affects the Current Account and Economic Growth of Pakistan. Over and under invoicing also cause an increase in unemployment and inflation. The research found that capital flight in huge volume is taking place in the form of over and under invoicing.

İstikrarlı bir ekonomik büyüme için temel şartlardan bir tanesi cari işlemler dengesinin sürdürülebilir
düzeyde olmasıdır. Türkiye ekonomisinde 2003 yılından itibaren yüksek büyüme oranlarının hedeflenmesi ile
beraber cari açık hızlı bir şekilde yükselmeye başlamıştır. Ayrıca artan cari açık genelde yüksek reel faizle gelen
portföy yatırımlarıyla finanse edilmeye çalışılmıştır. Hakkio ve Rush (1991) ile Husted (1992), cari işlemler
açığının sürdürülebilirliğinin varlığını, ithalat ve ihracat arasında uzun dönemli bir ilişkinin olup olmadığını
araştırarak ortaya koymaktadırlar. Uzun dönemli bir ilişkinin varlığı cari işlemler açıklarının sürdürülebilir
olduğunu, uzun dönemli ilişkinin olmaması da cari işlemler açıklarının sürdürülebilir olmadığını ifade
etmektedir. Bu bilgiler ışığında yapılan çalışmada, Türkiye ekonomisinde cari işlemler açığının sürdürülebilirliği
eşbütünleşme analizi yardımıyla sınanmıştır. 1980-2017 dönemi baz alınarak yapılan çalışmadan elde edilen
sonuçlar; Türkiye ekonomisinde ihracat ile ithalat serileri arasında uzun dönem bir ilişkinin varlığı ve
eşbütünleşme katsayısının 1’e oldukça yakın olması Türkiye ekonomisinde cari işlemler açığının sürdürülebilir
olduğunu göstermektedir.

Sustainability of the current account deficits in Turkey was evaluated according to the macroeconomic fundamentals together with discussing the composition of current account deficit and the way of financing to have insights about the future path of current account balance. Problem about current account deficits were considered as structural since they were caused by foreign trade deficits largely as an outcome of dependence of production and exports on imported intermediate goods. Furthermore, there were negative developments about the way of financing in last years that share of debt instruments in financing has increased against Foreign Direct Investment. As a result, it has seen that Turkey would continue to have current account deficits in the next years and sustainability of these deficits has become increasingly difficult.

This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate. This paper reviews the experiences of a number of European countries in coping with capital inflows. It describes the nature of the inflows, their implications for macroeconomic and financial stability, and the policy responses used to cope with them. The experiences suggest that as countries become more integrated with international financial markets, there is little room to regulate capital flows effectively. The most effective ways to deal with capital inflows would be to deepen the financial markets, strengthen financial system supervision and regulation, where needed, and improve the capacity to design and implement sound macroeconomic and financial sector policies. These actions will help increase the absorption capacity and resilience of the economies and financial systems to the risks associated with the inflows.