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Effect of Government Expenditure on GDP in the Turkish Economy

Author

Listed:
  • E. Simsek

    (Department of Economics, Istanbul Bilgi University, 34060, Istanbul, Turkey)

  • M. Orhan

    (School of Economics and Social Sciences, International Burch University)

  • F. Macit

    (Northeast Normal University)

Abstract

The objective of this article is to investigate the effect of government expenditure on GDP in Turkey from 2000Q1-2015Q4 by the superexogeneity test. As a consequence of satisfying both conditions of weak exogeneity and structural invariance, government expenditure is super exogenous to GDP which implies that the policy regime shift for the period of the Global Financial Crisis in Turkey did not cause structural variance in government expenditure. Indeed, the Lucas Critique which indicates that policy regime shifts cause structural breaks, appears to be refuted

Suggested Citation

  • E. Simsek & M. Orhan & F. Macit, 2017. "Effect of Government Expenditure on GDP in the Turkish Economy," International Econometric Review (IER), Econometric Research Association, vol. 9(2), pages 69-76, September.
    • Handle: RePEc:erh:journl:v:9:y:2017:i:2:p:69-76
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Lucas Critique; Government Expenditure; Superexogeneity Test;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • H5 - Public Economics - - National Government Expenditures and Related Policies
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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