
Current account balance, which is followed by all governments and policymakers, is one of the most critical macroeconomic indicators that can affect all dynamics of a country’s general economic environment from different aspects, such as inflation, foreign exchange rates and employment. There is not any consensus on the determinative factors of the CAB-Current account balance in the literature. Actually, the fact that there isn’t any consensus on the determinative factors of the CAB can be accepted as a natural result of the different structures of each country. Most worldwide studies have focused on just sectoral or just macro indicator-based determinants. With the motivation of taking both sectoral and macroeconomic conditional effects on the current account balance, the theoretical model was set as CAB as the dependent variable and ‘inflation’, ‘foreign direct investments’, ‘export to import ratio’, ‘tourism income’, and ‘growth’ as independent variables. The reason behind choosing tourism as the only sector is the compensation power of the tourism sector on the foreign trade deficit. With the data available for all variables, the time span of this paper was 2008-2019 by using the “ARDL” bounds methodology. The findings showed that there was a long-run and statistically significant positive relationship between the CAB and all independent variables of the model where just foreign exchange appreciation has a negative effect. It is thought that the model established in our research contributes to the literature in terms of including a combination of both macro data and sectoral data on the determinants of the current balance in Turkey.
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