On Energy Dependence, Current Account Deficit and Population in Turkey

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DOI: 10.4236/ojbm.2018.61012    1,504 Downloads   2,616 Views  Citations
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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.

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Berk, C. and Cin, K. (2018) On Energy Dependence, Current Account Deficit and Population in Turkey. Open Journal of Business and Management, 6, 183-192. doi: 10.4236/ojbm.2018.61012.

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