Vergi-Harcama Tartışması : Türkiye Örneği = The Tax-Spend Debate : The Case of Turkey

• Main Author: İhsan GÜNAYDIN
• Format: Article
• Language: English
• Published: Dogus University 2004-06-01
• Series: Doğuş Üniversitesi Dergisi
• Subjects: Türkiye; Açık; Vergiler; Harcamalar; Turkey; Deficit; Taxes; Expenditures
• Online Access: http://journal.dogus.edu.tr/index.php/duj/article/view/158

This paper examines the short and long-run relationship between goverment revenues, expenditures, GNP and interest rates for Turkey for the period 1987:1-2003:3, using error correction model (ECM) and the augmented vector autoregressive (VAR) model developed in Toda-Yamamoto (1995). The results indicate that there is one long-run equilibrium relationship among the four variables, and the causal relationship flows unidirectionally from government revenues to expentitures both in the short and long-run, providing support for the tax-spend theory.The results further reveal that the unidirectional causal impact of revenues on expentitures is significantly negative as hypothesized by Buchanan and Wagner. Thus, higher taxes seem an optimal resolution to the budget deficits in Turkey.