CURRENT ACCOUNT DEFICIT AND SUSTAINABILITY

Abstract

With the phenomenon of globalization increasing rapidly all over the world after the 1980s and widespread neoliberal economic policies, the opening up of the economy to all countries was encouraged and there was a significant increase in the trade of goods and services between countries. In this period, the current account deficit problem emerged as an important indicator of an economic crisis, especially in the open economy of developing countries. The current account deficit and whether this problem is sustainable has been the subject of important studies and an important literature has been created in this regard. Within the framework of liberalization policies introduced after 1980s for our country, open economic development was encouraged. In this period when the open economy was encouraged, the current account deficit increased in the Turkish economy and played a major role as a problem especially in the economic crises that emerged in the 1990s and beyond. Between 2000 and 2019, it was observed that the current account deficit was high in the years when the growth rates were high.