Budget Deficits and Inflation: Evidence from Turkey

Erkam S., Çetinkaya M.

The Macrotheme Review, cilt.3, sa.8, ss.12-22, 2014 (Hakemli Dergi)

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 3 Sayı: 8
  • Basım Tarihi: 2014
  • Dergi Adı: The Macrotheme Review
  • Derginin Tarandığı İndeksler: Index Copernicus
  • Sayfa Sayıları: ss.12-22
  • Hacettepe Üniversitesi Adresli: Evet

Özet

This study attempts to investigate the presence of causality between budget deficits and inflation rate. For this purpose, Granger-causality tests are employed on monthly budget deficit and inflation data of Turkey which covers two sub-periods namely, (1987:M1- 2003:M6) and (2005:M1-2013:M6). The results indicate a positive significant causality running from budget deficits to inflation rate during the high inflation period (1987:M1- 2003:M6). This causal link disappears during the low inflation period (2005:M1- 2013:M6).