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Fiscal sustainability in emerging countries: Evidence from Iran and Turkey

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  • Kia, Amir

Abstract

This paper investigates the fiscal sustainability of two emerging countries - Iran (an oil-producing country) and Turkey (an agricultural country) - for both stochastic and non-stochastic environments. Cointegration and multicointegration methodologies were used to evaluate fiscal budgeting processes in these countries. A model for testing the sustainability of a fiscal policy, based on Barro's tax smoothing, was also developed to test the Iranian fiscal policy. It was found that the fiscal budgeting process in both countries is not sustainable. Furthermore, the Iranian fiscal policy, as far as oil and gas income is concerned, is not a fully responsible policy.

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  • Kia, Amir, 2008. "Fiscal sustainability in emerging countries: Evidence from Iran and Turkey," Journal of Policy Modeling, Elsevier, vol. 30(6), pages 957-972.
    • Handle: RePEc:eee:jpolmo:v:30:y:2008:i:6:p:957-972
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    3. Lees, Kirdan, 2013. "Fighting fit? Assessing New Zealand’s fiscal sustainability," NZIER Working Paper 2013/5, New Zealand Institute of Economic Research.
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    5. Ahmad Zubaidi Baharumshah & Evan Lau, 2010. "Mean Reversion Of The Fiscal Conduct In 24 Developing Countries," Manchester School, University of Manchester, vol. 78(4), pages 302-325, July.
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    7. Chin-Hong Puah Author_Email: chpuah@feb.unimas.my & Evan Lau & Hui-Fern Teo, 2011. "Testing Budget Sustainability In Sarawak State," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding 2011-221, Conference Master Resources.
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    9. Saeid Mahdavi, 2010. "Fiscal Stringency and Fiscal Sustainability in the American States: Panel Evidence," Working Papers 0016, College of Business, University of Texas at San Antonio.
    10. Gomez-Biscarri, Javier & Hualde, Javier, 2015. "A residual-based ADF test for stationary cointegration in I(2) settings," Journal of Econometrics, Elsevier, vol. 184(2), pages 280-294.
    11. Togan Eğrican, Aslı & Caner, Selçuk & Togan, Sübidey, 2022. "Reforming public debt governance in Turkey to reach debt sustainability," Journal of Policy Modeling, Elsevier, vol. 44(5), pages 1057-1076.
    12. Hui, Hon Chung, 2013. "Fiscal sustainability in Malaysia: a re-examination," MPRA Paper 80018, University Library of Munich, Germany.
    13. Chen, Shyh-Wei & Wu, An-Chi, 2018. "Is there a bubble component in government debt? New international evidence," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 467-486.
    14. Chen, Shyh-Wei, 2014. "Testing for fiscal sustainability: New evidence from the G-7 and some European countries," Economic Modelling, Elsevier, vol. 37(C), pages 1-15.
    15. Mahsa Fathalizadeh, 2016. "Assessing the Iranian Fiscal Sustainability in Past and Future through Tax Side of the Economy," Iranian Economic Review (IER), Faculty of Economics,University of Tehran.Tehran,Iran, vol. 20(2), pages 187-201, Spring.
    16. María Lorena Marí del Cristo & Marta Gómez-Puig, 2013. "“Fiscal sustainability and fiscal shocks in a dollarized and oil-exporting country: Ecuador”," IREA Working Papers 201306, University of Barcelona, Research Institute of Applied Economics, revised Apr 2013.
    17. Cysne, Rubens Penha & Campos, Eduardo Lima, 2019. "Sustainability of the Brazilian public pebt an analysis using multicointegration," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 805, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
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