IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Measuring Fiscal Sustainability for Practical Use in Short-Term Policy Making

Listed author(s):
  • Arda Aktas

    (Marmara University)

  • Mehmet Emre Tiftik

    (University of Maryland)

Registered author(s):

    This study aims to assess the gross domestic debt sustainability of Turkey through construction of a risk index suitable for short-term policy making. Construction of the risk index follows a methodology similar to the Garcia and Rigobon’s Risk Management Approach (2004). However, unlike most fiscal sustainability studies carried out for Turkey, our index is based on a finite time horizon approach and emphasizes the importance of having a forward-looking measure of fiscal dynamics rather than a test based on past behavior. Within this framework, the main contribution of this paper is to introduce the uncertainty and finite horizon approach into the analysis of the fiscal sustainability of Turkey. A vector-autoregression (VAR) model is used primarily to estimate the joint dynamics of the related macro-variables for the 1990:1-2007:9 periods. Then, the simulated fiscal variables are used to construct the risk index. This index is based on a comparison of a target level of the debt ratio with a simulated debt ratio. Results indicate that the fiscal stance of Turkey has a sustainable outlook through the end of 2007:9.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.tek.org.tr/dosyalar/arda&emre_revised_tek_V2.pdf
    Download Restriction: no

    Paper provided by Turkish Economic Association in its series Working Papers with number 2009/3.

    as
    in new window

    Length: 22 pages
    Date of creation: 2009
    Handle: RePEc:tek:wpaper:2009/3
    Contact details of provider: Postal:
    Hoşdere Cad. 24/4, TR-Çankaya, Ankara

    Phone: (+90 312) 468 25 89
    Fax: (+90 312) 468 25 99
    Web page: http://www.tek.org.tr/
    Email:


    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:tek:wpaper:2009/3. 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: (Ercan Uygur)

    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.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.