Borç Hedeflemesi Rejimi ve Ekonomik Performans: Politik Makroekonomik Bir Bakış

Abstract

Since the 1970s, public debt has not displayed a stable trend and increases in public debt ended with debt crisis in many countries. Socio-political instability has significant effects on public spending and borrowing policies, and due to weak institutional structures unsound (myopic and populist) policies cannot be prevented in many economies. Thus, the presence of institutions that stabilize the economy (market) is essential for ensuring macroeconomic stability.

In this Ph.D. thesis, following the discussions in the political economy literature, flexible debt targeting is suggested as a market stabilizing fiscal regime. Accordingly, the objective is to investigate the effects of debt targeting regime on macroeconomic performance by using political macroeconomic models. The study focuses on the inclusion of a stable public-debt-ratio target into government's policy objectives and its effects on the intertemporal macroeconomic costs of unsound policies in both centralized and decentralized frameworks. In this vein, initially, the effect of the debt targeting regime on macroeconomic performance has been analyzed in the centralized framework in the case of a rise in political instability. According to the findings, the intertemporal cost of political instability decreases under the debt targeting policy. In addition, stricter debt targeting policy affects economic performance favorably in the second period and, contrary to the Keynesian view, fiscal adjustment policies conducted in the first period have expansionary effects on output performance in the second and overall period. According to another finding of the study, the debt targeting regime reduces the negative effects of strategic borrowing on macroeconomic performance. The main implications of flexible debt targeting regime under centralized framework are found also valid under the decentralized framework. Finally, another finding obtained in the study is that conservative debt targeting policy implemented by the government enables lower debt levels in the case of central bank independence.