ANALYSIS OF FISCAL SUSTAINABILITY IN TÜRKIYE: BOOTSTRAP FOURIER ARDL APPROACH

Abstract

Fiscal sustainability is one of the most important indicators of whether the public budget is within fiscal discipline. The sustainability of the public budget within the discipline affects many macroeconomic variables, such as inflation, economic growth, and income distribution. In this study, fiscal sustainability, one of the important determinants of macroeconomic factors, has been analysed by the Bootstrap Fourier ARDL cointegration method for the period 2006:01-2021:12 in Türkiye. A long-run cointegration relationship has been found between the variables. After determining the cointegration relationship, the long-run coefficient, short-run coefficient, and error correction model coefficient have been estimated. At a 5% significance level, the long-run coefficient was 0.36, the short-run coefficient was 0.21 and the error correction model coefficient was -0.54. As a result of the empirical findings, fiscal sustainability in Türkiye has been found to be weak in the relevant period.