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© 2023, The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.For the first time, this study introduces-proposes using the Armey curve hypothesis (ACH) for testing the environmental Kuznets curve hypothesis (EKCH) in the relevant literature. The rationale for this new proposed methodology is that both hypotheses are expected to have similar inverted U-shaped curves. Hence, we combine the aforementioned hypotheses to obtain a single composite model. This single model may allow us to calculate a maximum (optimum) level of government expenditures that will increase or decrease CO2 emissions for USMCA (the USA-Mexico-Canada Agreement) countries. To this end, our study employs an augmented mean group (AMG) estimator. The results demonstrate that the EKCH is verified by way of the AC model only for Mexico. Additionally, with the advantage of this approach, we calculated the optimal government spending level, which will increase both per capita real GDP (RGDPPC) and CO2 emissions in this country by around 26.4% of RGDPPC. This level of spending will be a kind of threshold point for the Mexican government’s policymakers. Hence, they will know that if they continue to spend more than this level, both the RGDPPC and CO2 emissions will decrease, implying either a lower RGDPPC or a cleaner environment. The primary purpose of the proposed methodology in this study is to reveal the possible effects of the government’s economic growth-oriented increased public expenditures on the environment in a single composite model. In other words, the relationship between economic growth and the environment is approached from the perspective of public spending, and it is reminded that governments should have harmonious and sustainable public spending policies for both economic growth and a cleaner environment.

This study re-investigates the money supply determination process for Japan. The methodology of this study, which differs from previous studies, is constructed on the assumption of potential nonlinear (asymmetric) relations between money supply and monetary base via money multiplier. To this aim, the nonlinear autoregressive distributed lag (ARDL) model by Shin, Yu and Greenwood-Nimmo, (2014) is applied. This model allows us to examine the endogeneity and exogeneity of the money supply determination process via the linkage of the money multiplier under expansionary and contractionary monetary policies of the Bank of Japan (BOJ) separately in a nonlinear manner. The main findings of the study indicate that the money supply determination process is endogenous with an unstable money multiplier for Japan for M1. However, this endogeneity in the BOJ’s contractionary monetary policy is more than its expansionary policy. This can be interpreted that the BOJ’s expansionary monetary policy has more of a determining role on money supply determination than its contractionary monetary policy. Additionally, the same findings indicate that the BOJ has more power to determine M1 than M2. This result can be interpreted that when the measure of money broadens the BOJ’s controllability on money supply decreases. In contrast, in our Canadian study (Ongan and Gocer, 2019) with the same nonlinear ARDL model, we concluded that the Canadian central bank (BOC) was able to determine money supply exogenously for M1, unlike the Japanese central bank (BOJ), and the money multiplier was stable for Canada.

This study examines whether trade policy-related uncertainties, scaled by TPU index, and the COVID-19 pandemic affect Japan’s bilateral commodity trade balance with the U.S concerning 60 industries. To this end, the nonlinear ARDL (autoregressive distributed lag) model is applied. Empirical findings of the disaggregated data model indicate that while changes in Japan’s TPU index have significant, either improving or worsening, impacts on this balance concerning 23 industries, changes in US TPU index have impact on only 32 industries. Additionally, based on the behaviors of Japanese and US consumers through their import demands, it can be interpreted that neither of them is uncertainty-sensitive to each other’s products and they continue to buy these products even if both countries’ TPU indexes keep rising. Another expected empirical finding is that the COVID-19 pandemic worsens the trade balances of Japan for different industries shown in the tables.

We investigate the validity of the environmental Kuznets curve (EKC) hypothesis for the NAFTA countries. In this investigation, we approach this hypothesis from a different methodology and propose employing the ARMEY curve hypothesis since the mathematical-functional propositions of both hypotheses were constructed on the same inverted U-shaped relationships. Thus, for the first time, it can be interpreted that the EKC hypothesis is empirically tested through a transmission mechanism of the ARMEY curve hypothesis in a single composite model. Therefore, this approach makes our study different from all empirical studies in the relevant literature. We apply the Augmented Mean Group (AMG) estimator to this aim. Empirical findings indicate that the ARMEY curve hypothesis was verified only for the USA. However, this new approach proposed in this study cannot test the EKC hypothesis through the ARMEY curve model for any NAFTA country since this approach requires verification of the ARMEY curve hypothesis and a significant composite model for the same NAFTA country. If our composite model was significant, it might make it possible to numerically determine a maximum real GDP per capita level that would minimize or maximize CO2 emission levels for the USA. Therefore, this study introduces-proposes this new methodology as an alternative way of testing the EKC hypothesis in the relevant literature for future empirical studies.

This study examines the asymmetric effects of uncertainties in monetary policy on the demand for money in Greece. In doing so, it introduces and uses the monetary policy uncertainty (MPU) index, which can probably be a very appropriate and robust explanatory variable in demand-for-money models. Therefore, this study with this index differs from previous empirical studies that use conventional uncertainty-based independent variables. Empirical findings of both models indicate that changes in the MPU index have significant effects on Greek money demand. Additionally, compendious inferences of the nonlinear model for the Greek people’s financial preferences are as follow as: (i): Greek people invest more in alternative financial instruments and/or spend their money rather than hold (demand) it when the MPU index rises, (ii): Greek people’s money demand in both increases and decreases in the MPU index is predominantly determined by longer-term bond rate changes.

The lower ecological footprint (EF) is the sine qua non condition of cleaner energy. The purpose of this study is to investigate the convergence of per capita ecological footprint for the USMCA (The North American Free Trade Agreement) countries, involving the USA, Canada, and Mexico, over the 1961 to 2016. To this aim, the TAR (threshold autoregressive) panel unit root test is applied. Empirical findings indicate that convergence of the EF exists in the second regime, which represents 48.08 percent of the sample, and divergence in the first. Canada is the transition country between two regimes. These results signify common environmental policies-actions among the USMCA countries to mitigate-stop their environmental degradation. Additionally, detected convergence and divergence also might help the policymakers of the USMCA countries to understand which strategies-policies-actions converge or diverge them in the case of EF.

PurposeThis study aims to re-examine the money stock determination process for South Korea under the assumption of the existence of potential asymmetric (non-linear) relations (a mechanism) between the money stock and the monetary base. Because, the true and detailed diagnosis of this mechanism is crucially important for the Bank of Korea’s (BOK)’ monetary policy, as this country has been adopting an inflation targeting policy (ITP) for a long-time.Design/methodology/approachThis paper applies the non-linear autoregressive distributed lag model by Shinet al.(2014). This model separates the original series of the monetary base into their increases (+) and decreases (−). The increases (+) and decreases (−) done by the BOK correspond to expansionary and contractionary monetary policies, respectively, in this study.FindingsThe empirical findings are two-fold. First, the money stock determination process in Korea has a non-linear (asymmetric) structure. This means that increases (+) and decreases (−) in the monetary base have asymmetric (different) impacts on money stock. Second, the BOK’s only expansionary monetary policy exhibits exogenous nature money stock determination with an almost stable money multiplier. These findings may help the BOK to take preventive precautions in its monetary policy implementations.Originality/valueThis study with its methodology may help the BOK to take preventive measures in its ongoing ITP proactively.

This study investigates the relations between COVID-19-related stay-at-home-tendencies and various health insurance coverages of people across US states. To this aim, the K-means clustering and panel regression analysis with cross-sectional dependence are applied. The main empirical finding reveals that various health insurance coverages have different level impacts on COVID-19-related stay-at-home-tendencies. People who are uninsured tend to stay at home the most as compared with people with private, Medicaid, Medicare and military health insurance coverages. As a result, it may be interpreted that uninsured people have serious concerns about affording healthcare costs associated with COVID-19 and, thereby, stay at home. However, people with private health insurance coverages tend to stay at home the least. This may also lead to the interpretation that people with private health insurance coverages feel safer and better protected against the rising risks of this pandemic outside their homes.

Purpose This study aims to examine the impacts of changing US trade policy uncertainty (henceforth, TPU Index) on US bilateral trade balance with China from a nonlinear methodology perspective. Design/methodology/approach The nonlinear auto regressive distributed lag (ARDL) model, recently developed by Shin et al. (2014), is applied. This model decomposes the TPU Index series into its increases (TPU+) and decreases (TPU−) and creates two new TPU Index series. Findings Empirical findings indicate that increases in the TPU Index improve the US bilateral trade balance only in the short-run (no long-run impact). However, decreases in the TPU Index worsen the US trade balance in the short run but improve it in the long run. Apart from these effects detected on US–China bilateral trade balances, this empirical study draws the conclusion that changing trade policy uncertainty plays a significant determining role for bilateral trade volumes. Originality/value Decomposed TPU index with the nonlinear ARDL model enables us to examine the separate impacts of the changes in TPU+ and TPU− indexes on US bilateral trade balance with China. Therefore, this model may discover potentially concealed-hidden true impacts of TPU index on US bilateral trade balance with this country.

This study reconsiders the Fisher effect for the UK from a different methodological perspective. To this aim, the nonlinear ARDL model recently developed by Shin et al. (2014), is applied over the periods of 1995M1-2008M9 and 2008M10-2018M1. This model decomposes the changes in original inflation series as two new series: increases and decreases in inflation rates. Hence, it enables us to examine the Fisher effect in terms of increases and decreases in inflation separately. The empirical findings support asymmetrically partial Fisher effects for the UK in the long-run only for the first period. Additionally, this study attempts to describe and introduce a different version of the partial effect concept for the first time for the UK.

This study examines the impacts of US and China trade policy uncertainties on the US’s commodity level bilateral trade balances (henceforth, BTBs) with China. To this end, newly created trade polic...

According to the Uncertainty Avoidance Index (UAI), the Japanese are one of the highest uncertainty avoidance people. This study examines the potential asymmetric impacts of increases and decreases...

Purpose This paper aims to investigate the presence of the Fisher effect for the USA from a new methodological perspective differing it from all previous studies using the common linear representation of the Fisher equation. Design/methodology/approach The nonlinear ARDL model, recently developed by Shin et al. (2014), is applied for the 10-year US Government bond rates over the period of 1985M1-2017M10. Findings The empirical findings indicate that the US Federal Reserve (FED) is a more predominant arbiter in the determination of interest rates during periods of declining inflation rates than periods of rising inflation rates. This finding may allow the FED to apply more proactive and prudent monetary policy. Additionally, this study newly describes and introduces a different version of the partial Fisher effect and extends the Fisher equation to some degree in terms of the partial Fisher effect. Originality/value To the best the authors’ knowledge, this method is applied for the first time in testing the Fisher effect for the USA.

Isik, Cem/0000-0001-5125-7648, WOS: 000498125600001, The global economic outlook is more uncertain than ever before and sensitive to uncertainties related to a variety of economic policies decisions of all stakeholders and governments. These perceived uncertainties may be the culprit in shrinking the size of overall economic activity. Under increasing uncertainties, travel and vacation plans of consumers can be canceled or postponed. Therefore, policy-related economic uncertainties are expected to affect tourism demand beyond well-established economic and noneconomic factors. in this study, we explore the efficacy and the impact of the economic policy uncertainty (EPU) index in predicting the tourism demand on international tourist arrivals (a measure of tourism demand) to the United States from Mexico and Canada over the period of January 1996-September 2017. the findings of the study reveal that EPU is a significant predictor as increases in the EPU index lead to decreases in tourism demand to the United States. Canadian tourists seem to be more sensitive to EPUs. Increases in the EPU index cause them to reduce Canadians' vacations to the United States proportionally more than the Mexicans. To enhance the explanatory power of current models, the uncertainty can be a theoretically significant construct thus needs to be included when calibrating demand models.

Bu çalışmada, İngiltere ve temel ticaret ortağı 17 ülke arasındaki ikili ticaret üzerinden J-eğrisi hipotezi araştırılmıştır. Bu amaçla, 1981Q1-2015Q1 dönemi verileri ve Doğrusal Olmayan Gecikmesi Dağıtılmış Otoregresif (NARDL) eş-bütünleşme yaklaşımı kullanılmıştır. Bu çalışmanın sonuçları, İngiltere ve 17 ticaret ortağı arasındaki ticaret için J-eğrisi hipotezinin geçerli olmadığını göstermektedir. Ayrıca, bu çalışma sonuçlarına göre, İngiliz sterlinin değerindeki azalış veya artış, İngiliz ticaret hadlerinde kısa dönemde asimetrik etkiler yaratmaktadır. Dolayısıyla bu çalışma, İngiltere’de yapılan 2016 Avrupa Birliği Üyeliği Referandumu sonrası, İngiliz sterlininin değerinde gerçekleşen dalgalanmaların kısa ve uzun dönemde İngiliz ticaret hadlerine etkisini ortaya koymaktadır., In this study, we investigate the validity of the J-curve hypothesis based on the bilateral trade models between the UK and its 17 main trading partner countries over the period of 1981Q1-2015Q1, by applying Nonlinear Autoregressive Distributed Lag (NARDL) cointegration approach. The results of this study suggest no evidence supporting the J-curve hypothesis between the UK and any of its 17 trading partners. We also find that depreciations and appreciations in value of the GBP have asymmetric effects on the UK’s trade balances in the short-run. Therefore, the results of this study have potential to shed light on both short run and long run consequences of the recent fluctuations of the GBP with respect to the trade balances after the UK’s EU membership referendum in 2016.

This study re-tests the EKC hypothesis for US states with a new methodology that differs from all previous empirical studies using traditional EKC models. To this aim, this methodology, for the first time, unifies two seemingly different but strongly interrelated hypotheses (models), namely the Armey curve (AC) and traditional EKC models, into one single composite model. The rationale for creating this composite model is twofold. First, the functional propositions of these two hypotheses are depicted with inverted U-shaped curves. Second, they also have economically interrelated-causal relationships. This means that rising government spending (through the AC hypothesis) increases real GDP per capita (RGDPPC) and, consequently, increases in RGDPPC (through the EKC hypothesis) increase CO2 emissions. The composite model created may also allow US state policymakers to determine a single maximum spending level that will maximize or minimize CO2 emissions. Empirical findings indicate that the composite model is capable of testing the EKC hypothesis for 7 US states. Additionally, for 7 US states, maximum spending level was calculated to be around 15% of their RGDPPCs. Hence, with this calculated spending level, policymakers of these states may be able to determine-adjust their golden spending levels so as not to cause environmental degradation and declines in GDP.

In this paper, we investigate the validity of the environmental Kuznets curve (henceforth, EKC) hypothesis for 8 OECD countries. To this aim, we decompose the per capita GDP series into its increases and decreases and consider only increases by excluding decreases from the model. Therefore, this method may enable us to test the EKC hypothesis more accurately, in accordance with the original theory. Following decomposition, we apply the fixed-effect regression model with Driscoll-Kraay standard errors, and the common correlated effects mean group (CCEMG) estimator. Empirical findings indicate that while the undecomposed model with undecomposed per capita GDP series supports the EKC hypothesis for 4 out of 8 countries, the decomposed model with decomposed per capita GDP series does not do so for any country. Hence, these mixed results reveal a need to employ different alternative techniques, such as the data transformation/decomposition applied in this study, for testing the EKC hypothesis.

This study investigates the impacts of pandemic-induced economic policy uncertainties (PIEPU) on the SP500, Nasdaq-100, and Dow Jones indexes (stock returns). To this aim, for the first time, newly created IDEMV (the Infectious Disease Equity Market Volatility index (henceforth, PIEPU index) is used. The Autoregressive Distributed Lag (ARDL) model and the Toda and Yamamoto (Journal of Econometrics, 1995, 66, pp. 225-250) causality test are applied for the 2009-2020 period. Empirical findings indicate that rises in the PIEPU index lead to falls of only the SP500 and Dow Jones indexes. Corporations in the tech-heavy Nasdaq100 index do not negatively respond to rises in the PIEPU index. Additionally, the negative impacts of the rises in the specifically COVID-19 based-constructed PIEPU (DCOVPIEPU) index on the SP500 and Dow Jones indexes are higher than the negative impacts of the general PIEPU index. This can be interpreted to mean that the larger the magnitude and spread rate of a pandemic, the larger the negative impacts on stock returns. In the sample period of this study, COVID-19 is the largest and most destructive pandemic compared to H1N1 and Ebola.

Isik, Cem/0000-0001-5125-7648, WOS: 000531976100001, This study re-tests the environmetal Kuznets curve (EKC) hypothesis for the US, based on a methodology that differentiates this study from previous empirical studies.To this aim, the per-capita income series (variable) is decomposed into its increases and decreases as two new time series and only one series, which contains income increases, is used. the rationale of this decomposition method is that the EKC hypothesis is originally postulated based on the impacts of income increases on environmental degradation. Therefore, this decomposition may allow us to test the EKC hypothesis more accurately through only income increases in accordance with its original postulation. Following decomposition, the ARDL approach to cointegration is applied between 1990M1 and 2019M7. Empirical findings of decomposed and undecomposed models are exactly opposite to each other. While the undecomposed model does not detect evidence of the EKC hypothesis for the US, the decomposed model strongly does so. This can lead to the interpretation that the decomposed model discovers-detects the existing but concealed validity of the EKC hypothesis, which the undecomposed model is not capable of detecting. Based on this result, this study proposes using this method as well, as an alternative technique for the EKC hypothesis testing models.

This paper investigates the dynamic causalities between economic growth, financial development, international trade, tourism expenditure and/on the CO2 emissions in Greece over the period of 1970–2014. For this purpose, the Zivot-Andrews unit root tests and the Autoregressive-Distributed Lag (ARDL) models were applied. The Vector Error Correction Model (VECM) and the robustness of causality test results indicate that Greece’s economic growth, financial development, international trade, tourism expenditures, and CO2 emissions are co-integrated in the long run. The empirical findings show that economic growth, financial development, international trade, and tourism expenditures caused increases in Greece’s CO2 emissions. It should be noted that tourism, as a leading sector in the Greek economy, has serious negative environmental impacts for Greece in the long run. Therefore, the policy makers of Greece should strongly take into consideration this threat from the tourism sector as the whole Greek eco...

This paper investigates the effects of uncertainty on tourism spending (direct sales) by USA domestic tourists over the period of 1998Q1–2015Q4. For this purpose, for the first time, the Economic Policy Uncertainty index was used as an independent variable in tourism demand analysis models. Unit root and cointegration tests are applied to account for unknown structural breaks. The empirical findings indicate that a higher level of Economic Policy Uncertainty leads to significant declines in tourism spending in the long run. Copyright © 2016 John Wiley & Sons, Ltd.

This paper analyzes the legitimacy of the Environmental Kuznets Curve (EKC) hypothesis for a group of seven (G7) countries over the period 1995&ndash, 2015. In addition to testing the EKC speculation, the authors also would like to understand the ways in which increases in renewable energy consumption and the international tourism receipt affect the CO2 emissions in G7 countries, because the energy and tourism sectors may have considerable direct impacts on CO2 emissions. In this investigation, a panel bootstrap cointegration test and an augmented mean group (AMG) estimator were applied. The empirical findings indicate that the tourism-induced EKC hypothesis is valid only for France. Additionally, it was detected that a rise in renewable energy consumption has a negative (reduction) impact on CO2 emissions in France, Italy, the UK, and the US. However, an increase in the receipt of international touristm has a positive (additional) impact on Italy&rsquo, s CO2 emissions. Hence, this country&rsquo, s decision-makers should re-review their tourism policy to adopt a renewable-inclusive one for sustainable tourism and the environment.

WOS: 000464854500035, PubMed ID: 30778930, This study aims to test the EKC (Environmental Kuznets Curve) hypothesis for the ten states, having the highest levels of carbon dioxide emissions in the USA, through the independent variables of real GDP, population, and renewable energy and fossil energy consumptions. To this aim, the panel estimation method with cross-sectional dependence is applied to data from 1980 to 2015. The empirical findings of the study indicate that the EKC (inverted U-shaped) hypothesis is valid only for Florida, Illinois, Michigan, New York, and Ohio. Interestingly, the negative impacts of fossil energy consumption on CO2 emission levels in Texas are not detected statistically although this state is the leading oil-producing state. Furthermore, the positive impacts of renewable energy consumption in Florida, officially known as "Sunshine State", are considerably low when compared with the other states.

This study investigates the validity of the EKC (environmental Kuznets curve) hypothesis for the 50 US states and a Federal District (Washington, D.C.). To this aim, the common correlated effects (CCE) and the augmented mean group (AMG) estimation procedures are applied between 1980 and 2015. While the CCE estimation does not support EKC hypothesis, the AMG does. The empirical findings of the AMG estimation indicate that only 14 states verify the EKC hypothesis. Additionally, the expected negative impacts of fossil energy consumption on the environment (CO2 emissions) are strongly detected in all states except Texas. However, the expected positive impacts of renewable energy consumption on the CO2 emissions are detected only in 13 states. Furthermore, the expected negative impacts of the population are not detected in some mostly populated states like New York, Texas, and Ohio. The overall findings of this study may help the US state-level policy makers in two ways: first, to understand whether their economic growths are sustainable (eco-friendly); second, to see how their fossil and renewable energy consumptions affect their environments and to review their energy policies.

Bu çalışmaUluslararası Atletizm Federasyonu tarafından düzenlenen Dünya AtletizmŞampiyonasının ev sahibi şehirdeki lise öğrencileri üzerinde bu spora karşı birfarkındalık yaratıp yaratmadığını ortaya koymayı amaçlamaktadır. Bunun içinturnuva öncesi ve sonrası olmak kaydıyla toplam 5265 öğrenci ile bir anketçalışması gerçekleştirilmiştir. Sorular bu spora öğrencilerin aktif olarakkatılımcı ve izleyici olmaları durumuna göre iki grupta oluşturulmuştur. Çalışmanın en temel bulgularından birisiortaya koymaktadır ki öğrencilerin atletizm etkinliklerine katılmasına en büyükiki engel atletizme ilgilerinin ve zamanlarının olmayışıdır. Ayrıca, anketekatılan öğrencilerin %25’inden fazlası atletizm tesissilerinin eksikliğinden veatletizm etkinliklerine nasıl katılacaklarını bilmeyişinden dolayıkatılamadığını bildirmiştir. Bir diğer önemli bulgu ise atletizme ilgisi olankız öğrencilerin atletizmi öğrenme ve katılma isteklerinin erkek öğrencilerdençok daha fazla olmasıdır. Ayrıca söz konusu bu turnuvanın ankete katılanöğrenciler üzerinde bu spora ait farkındalıklarını arttırdığı gözlemlenmiştir.Dolayısıyla bu noktada yerel ve hükümet yöneticileri gençlerin sportiffaaliyetler katılımlarını arttırmak için bu tür turnuvaların bölgelerinde çokçadüzenlenmesini sağlamalıdırlar., Thisstudy aims to analyze the effect of theIAAF World Indoor Track and Field Championships on high school students’awareness of the sports of track and field in the host city, Istanbul Turkey.Descriptive statistics and logistic regression wereapplied to the data collected from total 5,262 high school studentsbefore and after the event. Two groups of questions were asked of the students as participants and spectators.The main empirical findings indicate that the most significant factors that inhibit high school students’ ability toparticipate in track and field activities are lack of interest and time. Also, morethan 25 percent of the students said that factors keep them from participating intrack and field are lack of knowledge of how to participate and lack of accessto a track/facility. Additionally, it wasobserved that female students who are interested in track and field would like to learn and participate in theseactivities more so than their male peers. Another significant finding is that this tournament considerably increasedawareness of both female and male students. At this point, this study tries todraw attention to the importance of sponsoring this kind of sports organizationfor students and encouraging local and governmental sports authorities to hostevents in their cities.

This paper aims to investigate the validity of the J-curve hypothesis between Brazil and the USA using quarterly data for the period of 1981Q1- 2015Q1. To achieve this aim, the vector error correction (VEC) with cointegration, NARX (non-linear autoregressive exogenous) and ANFIS (adaptive neuro-fuzzy inference system) models are separately applied to strengthen this investigation. NARX and ANFIS, as artificial neural networks (ANN) models, were used for the first time in this study to test the validity of the J-curve hypothesis. It was found that the real exchange rate and income, as the independent variables, and the trade balance between Brazil and the USA, as the dependent variable, are cointegrated in the long-run. The empirical findings of all testing models examined in this study indicate that the J-curve hypothesis is not valid between Brazil and the USA. The real depreciations of the Brazilian currency do not make a positive contribution to the trade balance for Brazil.

Far better and more efficient teaching and understanding of economics, which predominantly encompasses human behaviors, is of the utmost importance. Both the correctness of personal financial decisions that individuals will make and the success of economic policies implemented and to be implemented at the macro level, require a through knowledge of economics and its fundamental rules. This study is an attempt to attract attention to the importance of utilizing literature, theatre, cinema, and humor, which are matters as everyday as economics, rather than employing classical presentation methods in economics education, in order to render economics more enjoyable, understandable, and appealing to college students.

Current Account Deficits (CAD) in Turkey have reached significantly high levels in the recent years and discussions around the sustainability of these deficits continue. On the other hand, thanks to its rapid development within the same period, the tourism sector is observed to increase its positive contribution to the current accounts balances. This study is an initiative to highlight the contribution of the tourism sector to the sustainability of the CAD in Turkey. Unit root and Cointegration tests have been used to this end. This approach is applied to the long-run relationship between Exports + Tourism Receipts (X + TR) and Imports + Tourism Expenditures (M + TE) for the period of 1980Q1–2005Q2. We question the weak sustainability hypothesis where the cointegrating vector is (X + TR)t = a + b(M + TE)t + η t . In this vector, if b equals to one and ηt is stationary, then the current account deficits are strongly sustainable, if b is between 0 and 1(0 < b < 1) and ηt is stationary or b = 1 but ηt is non...