Debt Sustainability and the Exchange Rate: The Case of Turkey
The paper attempts to estimate the primary surplus requirement for debt sustainability in Turkey, taking into consideration not only the operational deficit and seigniorage factors but also the exchange rate factor. In estimations, a modified version of the approach suggested by the World Bank (2000:16-18; 121-124) is used (see Appendix A for the derivation of the original formula, which is slightly different from the one in the document mentioned). The analysis is carried out in two steps. First the real interest rate is estimated and then the results are plugged into the primary surplus equation. The exchange rate factor is taken up during the estimation of the real interest rate in TL, on FX-related debt. The debt sustainability issue is evaluated by comparing the estimated primary surplus-to-GNP ratios required for debt sustainability, with the targeted primary surplus ratio, taking into consideration the real interest rate and composition of the existing debt stock.
|Date of creation:||Jun 2003|
|Date of revision:||Jun 2003|
|Contact details of provider:|| Postal: Ankara 06531|
Phone: +90 (312) 210 2003
Fax: (312) 210 1244
Web page: http://www.erc.metu.edu.tr
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.:
- Gian Maria Milesi Ferretti & Assaf Razin, 2000.
"Current Account Reversals and Currency Crises: Empirical Regularities,"
NBER Chapters,in: Currency Crises, pages 285-323
National Bureau of Economic Research, Inc.
- Gian M Milesi-Ferretti & Assaf Razin, 1998. "Current Account Reversals and Currency Crises; Empirical Regularities," IMF Working Papers 98/89, International Monetary Fund.
- Milesi-Ferretti, Gian Maria & Razin, Assaf, 1998. "Current Account Reversals and Currency Crises: Empirical Regularities," CEPR Discussion Papers 1921, C.E.P.R. Discussion Papers.
- Gian Maria Milesi-Ferrett & Assaf Razin, 1998. "Current Account Reversals and Currency Crises: Empirical Regularities," NBER Working Papers 6620, National Bureau of Economic Research, Inc.
- Morris Goldstein, 2003. "Debt Sustainability, Brazil, and the IMF," Working Paper Series WP03-1, Peterson Institute for International Economics.
- Sebastian Edwards, 2003. "Debt relief and fiscal sustainability," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 139(1), pages 38-65, March.
- Sebastian Edwards, 2002. "Debt Relief and Fiscal Sustainability," NBER Working Papers 8939, National Bureau of Economic Research, Inc.
- Merih Uctum & Michael Wickens, 1996. "Debt and deficit ceilings, and sustainability of fiscal policies: an intertemporal analysis," Research Paper 9615, Federal Reserve Bank of New York.
- Uctum, Merih & Wickens, Michael R., 1997. "Debt and Deficit Ceilings, and Sustainability of Fiscal Policies: An Intertemporal Analysis," CEPR Discussion Papers 1612, C.E.P.R. Discussion Papers.
When requesting a correction, please mention this item's handle: RePEc:met:wpaper:0306. 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: (Erol Taymaz)
If references are entirely missing, you can add them using this form.