IDEAS home Printed from https://ideas.repec.org/a/voj/journl/v68y2021i4p415-439id949.html
   My bibliography  Save this article

Fiscal and Monetary Policy Effectiveness in Turkey: A Comparative Analysis

Author

Listed:
  • Philip Arestis
  • Hüseyin Şen
  • Ayşe Kaya

Abstract

Relying on the Autoregressive Distributed Lag cointegration technique, this paper assesses the comparative effectiveness of the fiscal and monetary policy on output growth in Turkey over the period 2003:q1-2019:q1. The empirical findings show that both policies are effective in promoting output growth but with varying degrees, suggesting that the impact of monetary policy on output growth is more significant than that of fiscal policy. Overall, based on the findings, we can suggest that the Turkish authorities should set sight on monetary policy to achieve higher output growth while seeking ways to improve the growth-enhancing role of fiscal policy. To that end, among many others, budgetary flexibility can be increased through creating fiscal space, and growth-friendly tax and spending reforms can be undertaken without undermining growth-equity trade-off while giving priority to proper coordination of fiscal policy with monetary policy. Keywords: Macroeconomic policy, Macroeconomic policy management, Fiscal and monetary policy coordination, Turkey. JEL: E52, E62, E63.

Suggested Citation

  • Philip Arestis & Hüseyin Şen & Ayşe Kaya, 2021. "Fiscal and Monetary Policy Effectiveness in Turkey: A Comparative Analysis," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 68(4), pages 415-439.
    • Handle: RePEc:voj:journl:v:68:y:2021:i:4:p:415-439:id:949
    as

    Download full text from publisher

    File URL: https://panoeconomicus.org/index.php/jorunal/article/view/949/666
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Macroeconomic policy; Macroeconomic policy management; Fiscal and monetary policy coordination; Turkey;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:voj:journl:v:68:y:2021:i:4:p:415-439:id:949. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ivana Horvat (email available below). General contact details of provider: https://panoeconomicus.org/index.php/jorunal/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.