IMF Programmes Fiscal Policy and Growth Investigation of Macroeconomic Alternatives in an OLG Model of Growth for Turkey1

Date

2005-03-01

Author

Voyvoda, Ebru

Metadata

Show full item record

This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.

Item Usage Stats

215
views

0
downloads

In this paper, we investigate the fiscal policy alternatives on domestic debt management and public expenditures on education, cohort welfare, and growth for the Turkish economy. We utilise a growth model in the overlapping generations (OLG) tradition with intertemporally optimising agents and open capital markets, calibrated to the Turkish economy in 1990s. We examine the macroeconomic effects of the current IMF-led austerity programme driven by the objective of attaining primary fiscal surpluses and illustrate the ruinous effects of constrained human capital investments due to insufficient funds to public education, and constrained real production activities due to the current mode of financing of domestic debt. We then examine various taxation alternatives to mitigate the reductions in the availability of public funds to reproducible factors of production. Our results suggest that the current fiscal programme based on the primary surplus objective suffers from serious trade-offs on growth and fiscal targets, and that an alternative public expenditures programme with the objective of reviving public funds for education and for social infrastructure is likely to produce superior economic performance.

Subject Keywords

Economics and Econometrics

URI

https://hdl.handle.net/11511/35705

Journal

Comparative Economic Studies

DOI

https://doi.org/10.1057/palgrave.ces.8100065

Collections

Department of Economics, Article

Suggestions

OpenMETU
Core

Managing Turkish debt: An OLG investigation of the IMF's fiscal programming model for Turkey Voyvoda, Ebru (Elsevier BV, 2005-09-01) In this paper we investigate the fiscal policy alternatives on domestic debt management, cohort welfare, and growth for the Turkish economy. We utilize a model of exogenous growth in the overlapping generations (OLG) tradition with intertemporally optimizing agents and open capital markets, calibrated to the Turkish economy in 1990s. We examine the macroeconomic effects of the current IMF-led austerity program driven by the objective of attaining primary fiscal surpluses and illustrate the sensitivity of th...
Foreign money shocks and the welfare performance of alternative monetary policy regimes Senay, Ozge; Sutherland, Alan (Wiley, 2007-01-01) The welfare properties of monetary policy regimes for a country subject to foreign money shocks are examined in a two-country sticky-price model. Money targeting is found to be welfare superior to a fixed exchange rate when the expenditure switching effect of exchange rate changes is relatively weak, but a fixed rate is superior when the expenditure switching effect is strong. However, price targeting is superior to both these regimes for all values of the expenditure switching effect. A welfare-maximising ...
Macroeconomics of twin targeting in Turkey analytics of a financial computable general equilibrium model TELLİ, ÇAĞATAY; Voyvoda, Ebru; YELDAN, ALP ERİNÇ (Informa UK Limited, 2008-03-01) The paper provides an overview of the post-1998 Turkish economy and constructs a macroeconomic computable general equilibrium (CGE) model to illustrate the real and financial sectoral adjustments of the Turkish economy under the conditionalities of the 'twin targets': on primary surplus to gross national product (GNP) ratio and on the inflation rate. We further utilize the model to study three sets of issues: (i) the critical role of the expanded foreign capital inflows in resolving the macroeconomic impass...
Macroeconomic and institutional determinants of current account deficits Ozmen, E (Informa UK Limited, 2005-07-15) This study empirically investigates the effects of institutional and macroeconomic policy variables on current account deficits (CAD). Based on cross-section data for a broad number of countries, the results suggest that better governance increases whilst 'original sin' decreases the ability of an economy to sustain CAD. Exchange rate flexibility and openness appear to put a discipline on CAD. Consistent with the equity home bias and Feldstein-Horioka puzzle, CAD decrease with country size. The net impacts ...
The impact of value added components of GDP and FDI on economic freedom in Europe SAYARI MARCUM, NAZ; Sarı, Ramazan; Hammoudeh, Shawkat (Elsevier BV, 2018-06-01) This paper investigates the possibility of a long-run relationship between the Economic Freedom Index (EFI), Foreign Direct Investment (FDI) and value added components of GDP in thirty Eastern, Central and Western European countries. The study further examines whether the FDI and sector-specific components of GDP have any significant impact on economic freedom for these countries. We use annual data and employ Pedroni and KAO panel cointegration analyses to assess the long-run relationships. The results ind...

Citation Formats

E. Voyvoda, “IMF Programmes Fiscal Policy and Growth Investigation of Macroeconomic Alternatives in an OLG Model of Growth for Turkey1,” Comparative Economic Studies, pp. 41–79, 2005, Accessed: 00, 2020. [Online]. Available: https://hdl.handle.net/11511/35705.