Sustainability of Fiscal Policy: Estimating a Fiscal Reaction Function for Turkey


Vural G.

Uluslararası Yönetim İktisat ve İşletme Dergisi, cilt.14, ss.357-362, 2018 (Hakemli Üniversite Dergisi)

  • Cilt numarası: 14 Konu: 2
  • Basım Tarihi: 2018
  • Dergi Adı: Uluslararası Yönetim İktisat ve İşletme Dergisi
  • Sayfa Sayıları: ss.357-362

Özet

In this study a Fiscal policy analysis is used for Turkey between the periods 2006:12016:2
to assess the sustainability of fiscal policy. A fiscal reaction function is estimated to
analyze the effects of public debt and fluctuations in GDP on the primary balance. The fiscal
reaction function is obtained from the intertemporal government budget constraint in order
to depict the behaviour of government towards the public debt. The results suggest that the
primary budget balance reacts significantly to the previous increase in GDP gap.
Keywords: Fiscal Policy, Debt Sustainability, Fiscal Reaction Function.