Growth-maximizing public debt in Turkey: An empirical investigation
DOI:
https://doi.org/10.18559/ebr.2020.3.4Keywords:
public debt, economic growth, fiscal rule, Turkish economyAbstract
The aim of the paper is to empirically estimate the growth-maximizing debtto- GDP ratio in the case of Turkey. To calculate the growth-maximizing debt-to-GDP ratio FMOLS, DOLS, and CCR estimators are used for the period from 1960–2013. According to the empirical findings the growth-maximizing debt-to-GDP ratio varies between 34.3% and 38.7%. Based on a comparison of these ratios to current data (29.1% for 2018), Turkey has the capacity for additional borrowing to achieve a growthmaximizing debt-to-GDP ratio. If this additional borrowing capacity is used for public investment with a return greater than the interest cost of the additional debt economic growth will be maximized and public debt sustainability supported.Downloads
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Published
2020-09-30
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Research article- regular issue
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Copyright (c) 2020 Poznań University of Economics and Business

This work is licensed under a Creative Commons Attribution 4.0 International License.
How to Cite
Bulus, G. C. (2020). Growth-maximizing public debt in Turkey: An empirical investigation. Economics and Business Review, 6(3), 68-87. https://doi.org/10.18559/ebr.2020.3.4