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Volume 6 (20) Number 3 pp. 68-87

Gokay Canberk Bulus

Aksaray University, Faculty of Economics and Administrative Sciences, Department of Economics, Turkey

Growth-maximizing public debt in Turkey: An empirical investigation

Abstract:

The aim of the paper is to empirically estimate the growth-maximizing debtto-
GDP ratio in the case of Turkey. To calculate the growth-maximizing debt-to-GDP
ratio FMOLS, DOLS, and CCR estimators are used for the period from 1960–2013.
According to the empirical findings the growth-maximizing debt-to-GDP ratio varies
between 34.3% and 38.7%. Based on a comparison of these ratios to current data
(29.1% for 2018), Turkey has the capacity for additional borrowing to achieve a growthmaximizing
debt-to-GDP ratio. If this additional borrowing capacity is used for public
investment with a return greater than the interest cost of the additional debt economic
growth will be maximized and public debt sustainability supported.

pub/2020_3_68.pdf Full text available in in Adobe Acrobat format:
http://www.ebr.edu.pl/volume20/issue3/2020_3_68.pdf
Keywords: public debt, economic growth, fiscal rule, Turkish economy

DOI: 10.18559/ebr.2020.3.4

For citation:

MLA Bulus, Gokay Canberk. "Growth-maximizing public debt in Turkey: An empirical investigation." Economics and Business Review EBR 20.3 (2020): 68-87. DOI: 10.18559/ebr.2020.3.4
APA Bulus, G. C. (2020). Growth-maximizing public debt in Turkey: An empirical investigation. Economics and Business Review EBR 20(3), 68-87 DOI: 10.18559/ebr.2020.3.4
ISO 690 BULUS, Gokay Canberk. Growth-maximizing public debt in Turkey: An empirical investigation. Economics and Business Review EBR, 2020, 20.3: 68-87. DOI: 10.18559/ebr.2020.3.4