Public deficit sustainability, public debt and monetization in an endogenous growth model: an application for Turkey
This paper analyzes the long term sustainability of budgetary policies in a general equilibrium framework. The analysis is based on an overlapping generations model where the government fixes a tax rate on factor incomes, conducts unproductive and productive public spendings and determines the weight of public bonds issuance and monetization in deficit financing. A budgetary rule setting the economy on a balanced growth path is considered sustainable. The model is used to evaluate the sustainability of Turkish budgetary policies since 1980. The results show that Turkish budgetary policies became sustainable in the period 1999-2007. Alternative policy simulations show that Turkey could have conducted more expansionnist budget policies without risking sustainability during this period. The model shows also that the negative impact of inflation tax on private capital accumulation is greater than the impact of factor income tax.
|Date of creation:||Sep 2010|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.dauphine.fr/en/welcome.html|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Neil Rankin & Barbara Roffia, 2003.
"Maximum Sustainable Government Debt in the Overlapping Generations Model,"
University of Manchester, vol. 71(3), pages 217-241, 06.
- Rankin, N. & Roffia, B., 1999. "Maximum Sustainable Government Debt in the Overlapping Generations Model," The Warwick Economics Research Paper Series (TWERPS) 521, University of Warwick, Department of Economics.
- Rankin, Neil & Roffia, Barbara, 1999. "Maximum Sustainable Government Debt in the Overlapping Generations Model," CEPR Discussion Papers 2076, C.E.P.R. Discussion Papers.
- Fugazza, Marco & Jacques, Jean-François & Levent, Haluk & Rebeyrol, Antoine, 2003. "La croissance économique turque entre 1980 et 1995 s’explique-t-elle par les dépenses publiques, le travail informel ou le capital humain ?," Economics Papers from University Paris Dauphine 123456789/6261, Paris Dauphine University.
- Robert J. Barro, 1988.
"Government Spending in a Simple Model of Endogenous Growth,"
NBER Working Papers
2588, National Bureau of Economic Research, Inc.
- Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S103-26, October.
- Barro, R.J., 1988. "Government Spending In A Simple Model Of Endogenous Growth," RCER Working Papers 130, University of Rochester - Center for Economic Research (RCER).
- Barro, Robert J., 1990. "Government Spending in a Simple Model of Endogeneous Growth," Scholarly Articles 3451296, Harvard University Department of Economics.
- Voyvoda, Ebru & Yeldan, Erinc, 2005. "Managing Turkish debt: An OLG investigation of the IMF's fiscal programming model for Turkey," Journal of Policy Modeling, Elsevier, vol. 27(6), pages 743-765, September.
- Yakita, Akira, 2008. "Sustainability of public debt, public capital formation, and endogenous growth in an overlapping generations setting," Journal of Public Economics, Elsevier, vol. 92(3-4), pages 897-914, April.
- O. Cevdet Akcay & C. Emre Alper & Suleyman Ozmucur, 2001. "Budget Deficit, Inflation and Debt Sustainability: Evidence from Turkey(1970-2000)," Working Papers 2001/12, Bogazici University, Department of Economics.
- Futagami, Koichi & Morita, Yuichi & Shibata, Akihisa, 1993. " Dynamic Analysis of an Endogenous Growth Model with Public Capital," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 607-25, December.
- Futagami, Koichi & Shibata, Akihisa, 2003.
"Budget Deficits and Economic Growth,"
133, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
- Real Arai, 2011.
"Productive Government Expenditure and Fiscal Sustainability,"
FinanzArchiv: Public Finance Analysis,
Mohr Siebeck, Tübingen, vol. 67(4), pages 327-351, December.
- Arai, Real, 2008. "Productive government expenditure and fiscal sustainability," MPRA Paper 8553, University Library of Munich, Germany.
- Yesim Gurbuz & Thomas Jobert & Ruhi Tuncer, 2007. "Public debt in Turkey: evaluation and perspectives," Applied Economics, Taylor & Francis Journals, vol. 39(3), pages 343-359.
When requesting a correction, please mention this item's handle: RePEc:dau:papers:123456789/4341. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alexandre Faure)
If references are entirely missing, you can add them using this form.