DOI :10.26650/PB/SS10.2019.001.068   IUP :10.26650/PB/SS10.2019.001.068    Full Text (PDF)

Analysis of Cyclical Behavior of Fiscal Policy Through Fiscal Reaction Function: the Case of Turkey

Süleyman Kasal

To analyze of cyclical behavior of fiscal policy provides important information about the direction and outcomes

of fiscal policy. The cyclical behavior of fiscal policy is basically two-way. First is procyclical fiscal policy, second is

countercyclical fiscal policy. One way to analyze cyclical behavior of fiscal policy is to estimate the fiscal reaction

function for country. This study examine to what type of exhibit cyclical behavior of fiscal policy for in period

2000Q1-2015Q4 for Turkey. It is concluded that primary balance showed a positive response to the output gap.

Accordingly, it is concluded that fiscal policyis “countercyclical” for this sample. In other words, it can be said that

fiscal policy has been a role in reducing the severity of cyclical fluctuations. Even though fiscal policy appearsto

has been responsible,as a new evidence about debt sustainability it is also found that fiscal fatigue may occur in

very high debt levels Accordingly, fiscal policy implementations should be conduct within the framework of public

fiscal discipline. 

JEL Classification : E62 , H62 , H63


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