Учредители и издатели журнала Федеральное государственное автономное

Mustafa Alpin Gülşen
 
 
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Alanya Alaaddin Keykubat University, Antalya, Republic of Turkey
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 [e-mail]
ABSTRACT
Fiscal policies are designed to balance cyclical fluctuations. Fiscal policies in 
developed countries are mostly countercyclical. However, fiscal policies alone cannot 
explain the cyclical effect of fiscal policies implemented in developing countries. This 
is due to weak institutional structures, political restrictions, and populist practices. 
The study examined the effect of fiscal policies on business cycles in Turkey between 
1975–2020 using the ARDL model and annual data. According to the findings, public 
expenditures, investment expenditures, tax revenues, direct tax revenues, and budget 
balance increase the output gap. On the other hand, trade openness, government 
transfer payments, and indirect tax revenues reduce the output gap. Based on 
the empirical findings, the following comments can be made: (a) fiscal policy can 
be considered cyclical in this period; (b) cyclical fluctuations are reduced in open 
economies; (c) budget balance increases cyclical fluctuations (non-Keynesian effect). 
A possible reason for this is that the budget revenues mainly consist of indirect tax 
revenues (70% in Turkey). The significance of the results obtained in the study are 
as follows: (1) analyzes the impact of fiscal policies implemented by a developing 
economy on stability using a current and long time series; (2) provides an insight into 
the institutional quality and response of implemented fiscal policies through short- 
and long-term analysis; (3) analyzes the effect of Turkey’s ability to implement fiscal 
policies, which prefers the global markets integration model, and the tax technique it 
creates, on the economy.
KEYWORDS
fiscal policy, fiscal stabilization, output volatility, tax revenues, business cycles, 
ARDL model, Turkey