Fiscal sustainability test: The case of Turkey

Main Article Content

Mücahit Aydın Veli Yılancı


The main purpose of the study is to test the sustainability of fiscal policies for Turkish economy using quarterly series over the period 2000:1 to 2015:2. By considering Kremers (1989) sustainability condition we test the debt-income ratio by using Lee-Strazicich unit root test which allow structural breaks under both null and alternative hypothesis. The test results we obtained show that the series has a unit root which indicates the un-sustainability of public debt.

Keywords: Fiscal policies, Fiscal Sustainability, Unit root test




Download data is not yet available.

Article Details



Aslan, A. (2009). Bütçe Açığı Sürdürülebilirliğinin Dinamik Analizi: Türkiye Örneği. Maliye Dergisi, 157, 227-234.

Shyh-Wei Chen, (2014). Testing for fiscal sustainability: New evidence from the G-7 and some European countries, Economic Modelling, 37, 1-15.

Ehrhart, C. & Llorca, M. (2008). The Sustainability of Fiscal Policy: Evidence from a Panel of Six South-Mediterranean Countries. Applied Economics Letters, 15, 797-803.

Hepsağ, A. (2011). Mali Politikaların Sürdürülebilirliğinin Yapısal Kırılmalı Periyodik Birim Kök Testi ile Analizi: Türkiye Örneği. Doğuş Üniversitesi Dergisi, 12(1), 32-45.

Joseph, S. A. (2010). Financing Recovery: Implications of Natural Disaster Expenditure on the Fiscal Sustainability of the Eastern Caribbean Currency Unit (ECCU) States. Journal of Business, Finance and Economics in Emerging Economies, 5(2), 39-80.

Kremers, J.J.M., (1989). U.S. Federal Indebtedness and the Conduct of Fiscal Policy. Journal of Monetary Economics, 23, 219-238.

Lumsdaıne, R.L., & Papell, D.H. (1997). Multiple Trend Breaks And The Unit Root Hypothesis. The Review Of Economics And Statistics, 79(2), 212- 218.

Lee, J., & Strazıcıch, M.C. (2003). Minimum Lagrange Multiplier Unit Root Test With Two Structural Breaks. The Review Of Economics And Statistics, 85(4), 1082-1089.

Marks, V.S. (2004). Fiscal Sustainability and Solvency: Theory and Recent Experience in Indonesia. Bulletin of Indonesia Economic Studies, 40(2), 227-242.

Perron, P. (1989). The Great Crash, The Oil Price Shock, And The Unit Root Hypothesis, Econometrica, 57(6), 1361-1401.

Yol, M.A. (2009). Testing the Sustainability of Current Account Deficits in Developing Economies: Evidence from Egypt, Morocco, and Tunisia. The Journal of Developing Areas, 43(1), 177-197.

Zıvot, E., Andrews, D. (1992). Further Evidence On The Great Crash, The Oilprice Shock, And The Unit Root Hypothesis. Journal Of Business & Economic Statistics, 10(3), 251-270.