Fiscal sustainability test: The case of Turkey
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Abstract
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
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