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Shadow Economy And Public Debt Sustainability In Turkey


  • Ahmet Burçin Yereli
  • İbrahim Erdem Seçilmiş
  • Alparslan Başaran


The aim of this study is to examine the relationship between the shadow economy and public debt in Turkey. We elaborate on the questions regarding the negative effects of shadow economy on the sustainability of public debt observing the estimates about the size of shadow economy in Turkey. In the light of some scholars’ estimates, we re-evaluate the macroeconomic situation of Turkey. At the core of the study, we discuss how the government borrowing policies would differ if the shadow economy was included into the legal system. In order to examine the effects of shadow economy on sustainability, we use various sustainability indicators. There is a significant difference observed between the calculations which take into account the volume of shadow economy as a share of economic system and those that exclude shadow economy as an exogenous variable.

Suggested Citation

  • Ahmet Burçin Yereli & İbrahim Erdem Seçilmiş & Alparslan Başaran, 2007. "Shadow Economy And Public Debt Sustainability In Turkey," Economic Annals, Faculty of Economics, University of Belgrade, vol. 52(173), pages 85-104, April - J.
  • Handle: RePEc:beo:journl:v:52:y:2007:i:173:p:85-104

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    Cited by:

    1. Adem Y. Elveren Author-Email:, 2016. "The Effect of Informal Economy on Income Inequality: Evidence from Turkey," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 63(3), pages 293-312, June.
    2. González-Fernández, Marcos & González-Velasco, Carmen, 2014. "Shadow economy, corruption and public debt in Spain," Journal of Policy Modeling, Elsevier, vol. 36(6), pages 1101-1117.

    More about this item


    : Public Debt; Shadow Economy; Sustainability;

    JEL classification:

    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt


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