Journal of Management and Economics Research

Abstract

Because of the various problematic macroeconomic variables such as high inflation, high interest rates, high current account deficit, weak growth, hot Money dependency, low credit ratings and weak budget balance and so on current account balance and energy relations is of great importance in Brazil, India, Indonesia, South Africa and the Turkey are called fragile five. Therefore, the three countries that are net energy importers in fragile five (Brazil, India and Turkey) current account balance (current account balance / GDP), renewable energy (renewable electricity production / total production) and net energy imports (energy imports / total energy use) variables relations will be analyzed (S. Africaand Indonesiaare net energy exporters). The expected result is that as renewable energy use (investments) increase in these countries, the current account balance will improve and energy imports will decrease.

For the three countries mentioned, the relationship between the current balance, renewablee nergy and energy imports between 1990 and 2017 was examined. According to the results of ADF series in three countries; renewable energy in India, and the current balance in Brazil is I(0), while all other series are stable at I(1). According to the VAR model results for Turkey; There is cointegration between the series, a 1% increase in energy imports will cause a deterioration of -0.27% in the current balance. Unidirectional causality from energy imports to the current balance was found.

According to the ARDL Border Test for India and Brazil, a 1% increase in energy imports in India in the short term will lead to a -0.39% deterioration in the current account balance. A 1% increase in renewable energy in Brazil will result in a 0.23% improvement in the current account balance. In both countries, the negative and statistical significance of the  coefficient in the short term supports cointegration