An Intertemporal Benchmark Model for Turkey’s Current Account



zt

zt-p

(12)


cat
cat
-p

The coefficients of Γz and Γca (which are both 1 x p vectors) are computed using the VAR
estimates as well as the world rate of interest according to the methodology described in equation
(11). The implication of the model for a higher order VAR as noted in Ghosh (1995) is that the
coefficients of national cash flow are zero, the coefficient of the contemporaneous current
account is unity and the coefficients of the lagged current account are zero. Therefore, equation
(12) can be rewritten as

zt

*=[0 L 0 10 l0]


zt-p
cat


(13)


ca


t-p


Equality of the actual and optimal consumption smoothing current account can also be
visually depicted by graphing the two series. Both the visual and statistical tests of equality of the
two accounts are discussed in the next section.

The third implication of the model is the equality of the variance of the actual and the optimal
consumption smoothing current account. This can be tested with an F-test of equality of variance
between the two series. Results of this test will be presented and discussed in the following
section.

All these implications rest on the estimation of the VAR for the change in national cash flow,
(qt - it - gt ) and the actual consumption smoothing current account, cat = yt - it - gt -θct .

The compute the latter, we require the consumption tilting parameter, θ. From the equation of the

11



More intriguing information

1. THE DIGITAL DIVIDE: COMPUTER USE, BASIC SKILLS AND EMPLOYMENT
2. The name is absent
3. Business Networks and Performance: A Spatial Approach
4. Behavior-Based Early Language Development on a Humanoid Robot
5. The name is absent
6. Strengthening civil society from the outside? Donor driven consultation and participation processes in Poverty Reduction Strategies (PRSP): the Bolivian case
7. The name is absent
8. The name is absent
9. A COMPARATIVE STUDY OF ALTERNATIVE ECONOMETRIC PACKAGES: AN APPLICATION TO ITALIAN DEPOSIT INTEREST RATES
10. The name is absent
11. Social Irresponsibility in Management
12. CGE modelling of the resources boom in Indonesia and Australia using TERM
13. Plasmid-Encoded Multidrug Resistance of Salmonella typhi and some Enteric Bacteria in and around Kolkata, India: A Preliminary Study
14. Short Term Memory May Be the Depletion of the Readily Releasable Pool of Presynaptic Neurotransmitter Vesicles
15. The name is absent
16. The name is absent
17. Mergers under endogenous minimum quality standard: a note
18. The name is absent
19. Aktive Klienten - Aktive Politik? (Wie) Läßt sich dauerhafte Unabhängigkeit von Sozialhilfe erreichen? Ein Literaturbericht
20. Beyond Networks? A brief response to ‘Which networks matter in education governance?’