Siyaset Ekonomi ve Yönetim Araştırmaları Dergisi

Yazarlar: Umut ÇAKMAK, Atilla GÖKÇE

Konular:-

Anahtar Kelimeler:Inflation,Public Sector Deficit,JohansCointegration,VECM,Causality

Özet: The process of deterioration in the fundamentals, in particular those related to inflation and the public sector deficits, that had started in the 1980’s have accelerated in the 1990’s. In this context, this paper examines the long-term relationship between inflation and the public sector deficit and provides an analysis of the macro dynamics that derive from this relationship. The variables used in the analysis are inflation rate, interest payments/budget expenditures, budget deficit/GDP, money in circulation and exchange rate. Johansen cointegration method was used for longterm relationship and VECM-based Granger analysis was used for causality tests. The sample period is 1975-2016.The most important result of this article is that high and chronic inflation rates are one of the responsible of deterioration which appeared on the main economic variables particularly in the public sector balance. Similarly, in the 2000’s, on the basis of positive developments in the public balance lies in falling inflation rates quickly and permanently.

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