An Analysis on Fiscal Discipline and Inflation: The Case of Turkey
Journal Title: Uluslararası Ekonomi ve Yenilik Dergisi - Year 2017, Vol 3, Issue 2
Abstract
Ensuring fiscal discipline has become an important policy after 1994 in order to stabilize fiscal balances (budget balances, public debt) that deteriorated in Turkey after 1980. The interaction of applied fiscal discipline policies with inflation has been examined in this study. The relationship between inflation and budget balance, primary balance and public debt stock has been examined by using the Todo-Yamamoto causality test, impulse-response analyzes based on the period of 1980-2016 annual data. According to empirical findings, while an increase in budget deficit causes inflation to raise, primary surplus leads to a decrease in inflation. An increase in public debt stock has a reducing effect on inflation in the short run.
Authors and Affiliations
Suat Hayri ŞENTÜRK, Birol Karakurt, Burak Şahingöz
Keywords
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An Analysis on Fiscal Discipline and Inflation: The Case of Turkey
Ensuring fiscal discipline has become an important policy after 1994 in order to stabilize fiscal balances (budget balances, public debt) that deteriorated in Turkey after 1980. The interaction of applied fiscal discipli...