A new approach on testing the behaviour of the governments towards sustainability of fiscal policy in a small-open and politically instable economy

Telatar E., Bolatoglu N., Telatar F.

APPLIED ECONOMICS LETTERS, cilt.11, sa.5, ss.333-336, 2004 (SSCI) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 11 Sayı: 5
  • Basım Tarihi: 2004
  • Doi Numarası: 10.1080/1350485042000221643
  • Dergi Adı: APPLIED ECONOMICS LETTERS
  • Derginin Tarandığı İndeksler: Social Sciences Citation Index (SSCI), Scopus
  • Sayfa Sayıları: ss.333-336
  • Gazi Üniversitesi Adresli: Hayır

Özet

This study extends Bohn's (1998) model to the context of a small-open economy suffering from political and economic instabilities. A Markov-switching model is developed by incorporating a Bayesian Gibbs sampling simulation. The model is estimated for Turkish economy over the period of 1980-2001 to analyse the relationship between primary surpluses and government total liabilities. The main result of the study is that the relationship might be unstable due to the changes in intentions of the governments towards sustainability of fiscal policy.