IDEAS home Printed from https://ideas.repec.org/a/pal/compes/v47y2005i1p41-79.html
   My bibliography  Save this article

IMF Programmes, Fiscal Policy and Growth: Investigation of Macroeconomic Alternatives in an OLG Model of Growth for Turkey1

Author

Listed:
  • Ebru Voyvoda

    (Bilkent University, Ankara, Turkey.)

  • Erinç Yeldan

    (Bilkent University, Ankara, Turkey.)

Abstract

In this paper, we investigate the fiscal policy alternatives on domestic debt management and public expenditures on education, cohort welfare, and growth for the Turkish economy. We utilise a growth model in the overlapping generations (OLG) tradition with intertemporally optimising agents and open capital markets, calibrated to the Turkish economy in 1990s. We examine the macroeconomic effects of the current IMF-led austerity programme driven by the objective of attaining primary fiscal surpluses and illustrate the ruinous effects of constrained human capital investments due to insufficient funds to public education, and constrained real production activities due to the current mode of financing of domestic debt. We then examine various taxation alternatives to mitigate the reductions in the availability of public funds to reproducible factors of production. Our results suggest that the current fiscal programme based on the primary surplus objective suffers from serious trade-offs on growth and fiscal targets, and that an alternative public expenditures programme with the objective of reviving public funds for education and for social infrastructure is likely to produce superior economic performance. Comparative Economic Studies (2005) 47, 41–79. doi:10.1057/palgrave.ces.8100065

Suggested Citation

  • Ebru Voyvoda & Erinç Yeldan, 2005. "IMF Programmes, Fiscal Policy and Growth: Investigation of Macroeconomic Alternatives in an OLG Model of Growth for Turkey1," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 47(1), pages 41-79, March.
    • Handle: RePEc:pal:compes:v:47:y:2005:i:1:p:41-79
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/ces/journal/v47/n1/pdf/8100065a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/ces/journal/v47/n1/full/8100065a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ebru Voyvoda & Erinc Yeldan, 2015. "Aspects of Fiscal Policy in Turkey," Working papers wpaper109, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    2. Yeldan, Erinç. & Ercan, Hakan., 2011. "Growth, employment policies and economic linkages : Turkey," ILO Working Papers 994633753402676, International Labour Organization.
    3. repec:ilo:ilowps:463375 is not listed on IDEAS
    4. Ugurlu, Esra Nur, 2023. "Sectoral implications of policy induced household credit expansions," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 14-31.
    5. Annabi, Nabil & Harvey, Simon & Lan, Yu, 2011. "Public expenditures on education, human capital and growth in Canada: An OLG model analysis," Journal of Policy Modeling, Elsevier, vol. 33(6), pages 852-865.
    6. Voyvoda, Ebru & Yeldan, Erinc, 2005. "Managing Turkish debt: An OLG investigation of the IMF's fiscal programming model for Turkey," Journal of Policy Modeling, Elsevier, vol. 27(6), pages 743-765, September.
    7. Cagatay Telli & Ebru Voyvoda & Erinc Yeldan, 2008. "Macroeconomics of twin-targeting in Turkey: analytics of a financial computable general equilibrium model," International Review of Applied Economics, Taylor & Francis Journals, vol. 22(2), pages 227-242.
    8. Pedro Bação & Marta Simões, 0. "Is the Welfare State Relevant for Economic Growth? Evidence for Portugal," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 0, pages 1-27.
    9. Yeldan, Erinc., 2011. "Macroeconomics of growth and employment : the case of Turkey," ILO Working Papers 994674263402676, International Labour Organization.
    10. Maisonnave, Hélène & Decaluwé, Bernard, 2008. "Educational Policy, Growth and Labor Market in South Africa: A Dynamic Computable General Equilibrium Analysis," Conference papers 331689, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. repec:ilo:ilowps:467426 is not listed on IDEAS
    12. Pedro Bação & Marta Simões, 2020. "Is the Welfare State Relevant for Economic Growth? Evidence for Portugal," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 62(3), pages 494-520, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:compes:v:47:y:2005:i:1:p:41-79. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.