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THE SUSTAINABILITY OF PUBLIC DEFICIT AND DEBTS: SAMPLE OF TURKEY

Journal: Business & Management Studies: An International Journal (Vol.5, No. 2)

Publication Date:

Authors : ;

Page : 209-222

Keywords : Public Debt; Sustainability; Turkish Economy;

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Abstract

The developing countries which include Turkey as well, have been adversely affected in terms of sustainability of fiscal policy due to the 2001 crisis and the global crisis in 2008. These developments, which are important for the sustainability of fiscal policy, have increased the interest of researchers in the subject. Therefore, the purpose of this study is to determine whether Turkey's fiscal policy is sustainable for the period 1976-2016. In this study, which examines the sustainability of public debts in Turkey during the period 1976-2016, Bohn (1989) based econometric model with time-varying parameters was estimated by considering the structural changes experienced by the Turkish economy. In this model, the basic relationship is between the dependent variable ration of primary surplus to GDP (fdoranı) and the explanatory variable of ration of public debt to GDP kboran. This relationship was empirically positive and statistically significant. This result provides evidence that public debt is sustainable when Turkey's budget policy is assessed for the period covered.

Last modified: 2018-02-03 05:59:34