Analysis of the Relationship Between Public External Debt and Government Expenditures in Türki̇ye
Chapter from the book: Gözen, S. & Sağdıç, E. N. (eds.) 2024. Selected Public Finance Issues in Türkiye.

Serhat Gözen
Kütahya Dumlupınar University
Ersin Nail Sağdıç
Kütahya Dumlupınar University

Synopsis

Public external debt is a situation that decreases national income and increases tax revenues in the period it is paid back. At the same time, it has an effect of increasing public expenditure in terms of interest payments. However, when it is considered that external debt is generally applied for a long term, it can be clearly stated that it can be characterized as a burden transferred to future generations. In this sense, it appears as an additional tax burden or public expenditure transferred to future generations. From this point of view, the focus of this study is to examine the relationship between public expenditures and public external debt. The aim of this study is to analyze the effect of government expenditures on public external debt in Türkiye for the period of 1990-2023. The relationship between government expenditures and public external debt was investigated by the ARDL analysis. The long-term ARDL cointegration test results of the study show that there is a positive relationship between the government expenditures and the public external debt in Turkey. In other words, %1 change in government expenditures will cause %0,23 percent positive change in public external debt in the long run. In addition, the causality test results showed the existence of a bidirectional causality relationship between government expenditures and public external debt.

How to cite this book

Gözen, S. & Sağdıç, E. N. (2024). Analysis of the Relationship Between Public External Debt and Government Expenditures in Türki̇ye. In: Gözen, S. & Sağdıç, E. N. (eds.), Selected Public Finance Issues in Türkiye. Özgür Publications. DOI: https://doi.org/10.58830/ozgur.pub532.c2194

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Published

December 20, 2024

DOI