Growth effects of local government spending: evidence from outer space

Download

index.pdf

Date

2016

Author

Ceylan, Elif Semra

Metadata

Show full item record

Item Usage Stats

173
views

77
downloads

In this study, we estimate the local government spending multiplier for Turkey using the province-level variation in government spending for 2002-2013. The main diffculty is that there is no official province-level GDP reported for this period. We use the night lights data as a proxy to construct province-level GDP indices for Turkey between 2002-2013. Employing an instrumental variables (IV) strategy motivated by the structure/timing of local elections in Turkey, we find that 1 Turkish lira public investment generates up to 2.7 Turkish lira national income. This suggests that the fiscal multiplier is around 2.7 in Turkey, which is above the fiscal multiplier estimates reported in the literature. This results contributes to the recent debates on the effectiveness of government spending by showing that fiscal policy has a great potential to lift economic growth. In this study, we estimate the local government spending multiplier for Turkey using the province-level variation in government spending for 2002-2013. The main diffculty is that there is no official province-level GDP reported for this period. We use the night lights data as a proxy to construct province-level GDP indices for Turkey between 2002-2013. Employing an instrumental variables (IV) strategy motivated by the structure/timing of local elections in Turkey, we find that 1 Turkish lira public investment generates up to 2.7 Turkish lira national income. This suggests that the fiscal multiplier is around 2.7 in Turkey, which is above the fiscal multiplier estimates reported in the literature. This results contributes to the recent debates on the effectiveness of government spending by showing that fiscal policy has a great potential to lift economic growth.

Subject Keywords

Municipal lighting., Expenditures, Public., Municipal government., Government spending policy.

URI

http://etd.lib.metu.edu.tr/upload/12620407/index.pdf
https://hdl.handle.net/11511/26027

Collections

Graduate School of Social Sciences, Thesis

Suggestions

OpenMETU
Core

Debt sustainability and the exchange rate: The case of Turkey Keyder, Nur (Orta Doğu Teknik Üniversitesi (Ankara, Turkey), 2003-6-1) 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 (World Bank, 2000, “Turkey-Country Economic Memorandum-Structural Reforms for Sustainable Growth, Vol. I and II”, Report No. 20657-TU, Washington, DC, 16-18; 121-4) is used. The analysis is carried out in two steps. F...
Sociospatial impacts of deindustrialization : the case of Karabük Çevik, Murat; Şengül, Hüseyin Tarık; Department of City and Regional Planning (2003) The main objective of this study is to evaluate the socio-spatial impacts of the restructuring of a locality, Karabük, which was shaped under a different development strategy, namely, import substitution industrialization strategy. Karabük case shows that establishment of Karabük Iron and Steal Factories was decided on the basis of political and social priorities of a period when there was limited competitive environment and such priorities have lost their primacy under the export oriented growth strategy i...
MILITARY EXPENDITURES, ECONOMIC GROWTH AND SPATIAL SPILLOVERS YILDIRIM ÖCAL, JÜLİDE; Öcal, Nadir (2016-01-02) The relationship between economic growth and military expenditure has been the subject of a large literature in defence economics. This study analyses the influence of military expenditures on economic growth in a global perspective for the time period 2000-2010 taking spatial dimension into account. The augmented Solow model is employed to investigate the defence-growth nexus using the cross-sectional data relating to 128 countries. Following a traditional regression analysis, spatial variations in the rel...
Analysis of regional income inequalities of CEECs and Turkey in the light of EU regional policy instruments Şen, Şener; Kayasü, Serap; Department of City and Regional Planning (2005) The aim of this study is to determine regional income level and disparities in CEECs and Turkey in a comparison of new 26 NUTS-II regions for Turkey with 49 NUTS-II regions of CEECs in the period of 1995 and 2001 by using the indicator of GDP per capita in terms of purchasing power standard. In this study, furthermore, those questions have been discussed: whether the EU is a chance for reducing regional inequalities and growth of the regional wealth in Turkey, and whether Turkey is another thread for the EU...
Budget deficits, money growth and inflation: the Turkish evidence Tekin-Koru, A; Ozmen, E (2003-03-01) The paper investigates the long-run relationships between budget deficits, inflation and monetary growth in Turkey considering two alternative trivariate systems corresponding to the narrowest and the broadest monetary aggregates. While the joint endogeneity of money and inflation rejects the validity of the monetarist view, lack of a direct relationship between inflation and budget deficits makes the pure fiscal theory explanations illegitimate for the Turkish case. Consistent with the policy regime of fin...

Citation Formats

E. S. Ceylan, “Growth effects of local government spending: evidence from outer space,” M.S. - Master of Science, Middle East Technical University, 2016.