SavedAdd your journal

Journals / Ege Akademik Bakış Dergisi / 2003 / Cilt: 3 - Sayı: 1

THE EFFECT OF NOMINAL GOVERNMENT DEFICITS ON ECONOMIC GROWTH

Yeşim KUŞTEPELİ
Pages
47–57
Publication Date
2003-05-01
DOI
—
🏛️Bibliographic metadata and full text access for this article are provided via DergiPark.
DergiPark Record ↗
✨

AI Summary & Key Takeaways

AI Insight
⚡ TL;DR(Too Long; Didn't Read)

The effect of inflation on real GNP growth is weak and in the reverse direction.

📌 3 Key Takeaways

🎯
Objective & Hypothesis:It is basically accepted by now that there is a positive relationship between the nominal government deficits and inflation.
📊
Key Findings & Data:Government deficits may be financed by monetary growth due to several reasons but whatever the reason, the result is an increase in inflation.
💡
Conclusion & Impact:The effect of inflation on real GNP growth is weak and in the reverse direction.
🔬Design:Research Article
📍Scope:2001 Verileri
⚙️Variables:Domain Parameters

Abstract

It is basically accepted by now that there is a positive relationship between the nominal government deficits and inflation. Government deficits may be financed by monetary growth due to several reasons but whatever the reason, the result is an increase in inflation. This in turn may affect the growth of real GNP negatively, due to its adverse effects on the allocation of resources, on the labor market and on the decisions of firms. This paper combines these two links, i.e. nominal government deficits and inflation, and inflation and real GNP growth. It further shows the effect of nominal government deficits on the economic growth for Turkey. Our results from cointegration and causality tests show that for Turkey for the period of 1950 2001, nominal government deficits led to increases in the monetary base only in the short run, causing inflation both in the short and the long run. The effect of inflation on real GNP growth is weak and in the reverse direction.

Özet

Cari hükümet açıkları ve enflasyon arasında pozitif bir ilişkinin varlığı genellikle kabul edilmiş bir olgudur. Hükümet açıkları birçok sebepten dolayı parasal büyüme ile finanse edilebilir; ancak sebep ne olursa olsun sonuç enflasyonda bir artıştır. Bu da kaynak dağılımı, işgücü piyasası ve firma kararlarına ters etkileri nedeniyle reel GSMH’daki büyümeyi negatif olarak etkileyebilir. Bu çalışmanın amacı, cari hükümet açıkları ve enflasyon, enflasyon ve reel GSMH’daki büyüme arasındaki iki bağlantıyı birleştirmek ve Türkiye’de cari hükümet açıklarının ekonomik büyümeye etkisini göstermektir. Eşbütünleşme ve nedensellik testlerini sonuçları, Türkiye’de 1950-2001 yılları arasında cari hükümet açıklarının sadece kısa dönemde parasal tabanda artışlara yol açarak, hem kısa hem de uzun dönemde enflasyona neden olduğunu göstermektedir. Enflasyonun reel GSMH büyümesine etkisi ise zayıf ve ters yöndedir

🔖

Cite This Article

KUŞTEPELİ, Y. (2003). THE EFFECT OF NOMINAL GOVERNMENT DEFICITS ON ECONOMIC GROWTH. Ege Akademik Bakış Dergisi, Cilt: 3 - Sayı: 1, 47–57. https://ajindex.com/articles/752433

📄 Full Text PDF Viewer

📄

PDF görüntüleyici hazırlanıyor...

References (16)

  1. AGHEVLI, B.B. and KHAN M.S. (1978): “Government Deficit and the Inflationary Process in Developing Countries”, IMF Staff Papers, 25, pp. 383- 416. AHKING, F.W. and MILLER S.M. (1985): “The Relationship Between Government Deficit, Money Growth and Inflation”, Journal of Macroeconomics, 7(4), pp. 447-467.
  2. ALLEN, S.D. and SMITH M.D. (1983): “Government Borrowing and Monetary Accommodation”, Journal of Monetary Economics, 12, pp. 605-616.
  3. ATKINS, F. J. and COE P. J.,(2002): “ An ARDL Bounds Test of the Long-Run Fisher Effect in the United States And Canada”, Journal of Macroeconomics, 24 (2), pp. 255-266.
  4. BALL, L. and CECCHETTI S.G. (1990): “Inflation and Uncertainty at Short and Long Horizons”, Brookings Papers on Economic Activity, 1, pp. 215- 245. ______ (1992): “Why does High Inflation Raise Inflation Uncertainty?”, Journal of Monetary Economics, 29, pp. 371-388.
  5. BARRO, R. (1996): “Inflation and Growth”, Federal Reserve Bank of St. Louis Review, 78(3), pp. 153-169.
  6. BRUNO, M. and EASTERLY W. (1996): “Inflation and Growth: In Search of a Stable Relationship”, Federal Reserve Bank of St. Louis Review, 78(3), pp. 139-146.
  7. CANAVESE, A.J. and HEYMANN D. (1992): “Fiscal Lags and the High Inflation Trap”, Quarterly Review of Economics and Finance, 32(2), pp. 100-109.
  8. CEBULA, R. J. (1995): “ The Impact of Federal Government Budget Deficits on Economic Growth in the United States: An Empirical Investigation, 1955-1992”, International Review of Economics and Finance, 4(3), pp. 245-252
  9. CHAREMZA, W. W. DEADMAN and D. F. (1992): New Directions in Econometric Practice, Edward Elgar, England. DARRAT, A. (1986): “Money, Inflation and Causality in the North African Countries: an Empirical Investigation”, Journal of Macroeconomics, 8(1), pp. 87-103.
  10. DICKEY, D. and FULLER W.A. (1979): “Distribution of the Estimates for Autoregressive Time Series with a Unit Root”, Journal of American Statistical Association, 74(366), pp. 427-431. ________________________ (1981): “Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root”, Econometrica, 49 (4), pp. 1057-1072.
  11. DORNBUSCH, R., FISCHER S. and STARTZ R. (2001):
  12. Maroeconomics, McGraw Hill, Eight Edition,
  13. International Edition.
  14. ENGLE, R. F. and GRANGER C. W. J. (1987): “Cointegration and error Correction: Representation, Estimation, And Testing”, Econometrica, 55, pp. 251-276.
  15. ENDERS, W. (1995):
  16. Applied Econometric Time Series, Wiley Series In Probability and Mathematical Statistics, John Wiley & Sons, Inc. FAHMY, Y