TITLE:
On Energy Dependence, Current Account Deficit and Population in Turkey
AUTHORS:
Cem Berk, Kazim Oguz Cin
KEYWORDS:
Economy, Energy Dependence, Population, Foreign Trade Deficit
JOURNAL NAME:
Open Journal of Business and Management,
Vol.6 No.1,
January
29,
2018
ABSTRACT: Energy industry is one of the most important elements in the development of
countries. Energy dependence occurs when the energy produced in a country
by using its own resources is unable to meet the consumption where the lacking
amount needs to be imported. This might lead to significant effects in the
current account of an economy. However in addition to non-renewable energy
sources (such as natural gas, and oil), alternative production is available in
Turkey (such as wind, solar, geothermal, biomass, and hydrogen) as well as
projects to install nuclear plants. The population in Turkey on the other hand
is unlikely to decrease even in the long term. In the Turkish economy, energy
industry might affect the economic growth, trade deficit and population
growth. This is proven by various studies explained in the summary of literature
section of this paper. In this paper, energy consumption, population and
trade deficit are analyzed in a data sample from a period of 1970 until 2014.
The data is obtained from World Bank and Central Bank of Turkey. The relationship
between energy consumption, population and current account deficit
is analyzed by using Granger causality analysis, Augmented Dickey Fuller
(ADF) Unit Roots Test”, Vector Autoregression (VAR) and Vector Error
Correction Models (VECM). As a result of the “Granger Causaility Analysis”,
it is determined that there is a two way relationship between energy consumption
and trade deficit and one way relationship between population and trade
deficit and between population and energy consumption. Therefore energy
production strategies including the use of existing reserves and alternative
energy sources are suggested for sustainable economic growth.