The main objective of this paper is to analyze empirically the effects of government spending on private investment, evaluating the existence of crowding-out/-in effects, in Turkey for the 1975-2011 period. In contrast to previous studies, we employed in the paper the modified version of David A. Aschauer?s (1989) model, which allows us to see the effects of each component of government spending taking place in the Turkish budget system. The empirical findings of the paper showed that government current transfer spending, government current spending, and government interest spending crowdout private investment, whereas government capital spending crowds-in private investment in Turkey.

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This paper studies the role of fiscal policy, which has recently come to the fore as a rescuer during economic crises and focuses very much on its historical role in economic crises in general and in the recent crisis in particular.

This study empirically examines the validity of the twin and triple deficits hypotheses using bootstrap panel Granger causality analysis and an annual panel data set of six post-communist countries (Russia, Poland, Ukraine, Romania, the Czech Republic, and Hungary) from 1994 to 2012. Our findings, based on panel data analysis under cross-sectional dependence and country-specific heterogeneity, support neither the twin deficits hypothesis nor its extended version, the triple deficits hypothesis, for any of the countries considered. In other words, we find no Granger-causal relationship between budget deficits and trade (or current account) deficits or among budget deficits, private savings-investment deficits, and trade deficits.

This paper studies an empirical analysis of the causality between education expenditure, health expenditure, and economic growth for the selected eight developing countries (Argentina,

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Using annual data over the period 1980–2014, this paper attempts to provide an answer to the question of whether fiscal consolidation promotes growth and employment in the context of the PIIGGS countries (Portugal, Ireland, Italy, Greece, Great Britain, and Spain) by using the Bootstrap Granger causality analysis proposed by Kónya (2006), which allows testing for causality on each individual country separately, and by accounting for dependence across countries. Our findings indicate that in no country considered does fiscal consolidation promote growth. However, fiscal consolidation negatively affects employment in Portugal and Italy, whereas it positively influences employment in Great Britain. Based on our findings, we may suggest that the effects of fiscal consolidation on employment produce mixed results, varying from country to country.

This study attempts to establish the possible existence of the long-run interrelationship between interest rates, inflation, and exchange rates in five fragile emerging market economies (Brazil, India, Indonesia, South Africa, and Turkey), what is so-called by Morgan Stanley 'Fragile Five'. To do so, we utilize Li and Lee's (2010) Autoregressive Distributed Lag (ADL) test for threshold cointegration and apply it to sample countries' monthly time-series data from 2013:1 to 2018:12. Overall, our primary results are threefold: First, there seems to be a long-run positive relationship between actual rates of inflation rates and nominal interest rates supporting the validity of the ex-post Fisher hypothesis for all the sample countries. Second, the sample countries' data supports the presence of a cointegrating relationship between interest rates and exchange rates for the case of Brazil, India, and Turkey but not for the case of Indonesia and South Africa. Lastly, without exception, exchange rates and actual rates of inflation in all the sample countries examined tend to co-move in the long-run, implying that the depreciation of their currencies creates inflation through raising the prices of imported goods. The results above are widely compatible with both theoretical expectations and the results of the most previous empirical studies on the long-run interrelationships between interest rates, inflation, and exchange rates in the literature.In this study, we employ Li and Lee's (2010) Autoregressive Distributed Lag (ADL) test for threshold cointegration as the method of estimation. This estimation method has several superiorities compared to its rivals. First, the ADL test does not require the classification of variables into I(1) or I(0). Other cointegration procedures, such as those proposed by Engle and Granger (1987) and Johansen (1988), require checking the order of the integration of variables by using unit root tests and all variables in the model must be integrated of the same order. Second, the ADL test provides better performance in small sample sizes. Lastly, it allows for estimating the long-and the short-run parameters of the model simultaneously. Since the ADL test can overcome these three critical problems, our empirical results contribute to the understanding of the research questions that we seek to find answer in this study.The remainder of the study is organized as follows: The following two sections provide a comprehensive background to the study, focusing on not only the theoretical aspects of the possible relationships between interest rates, inflation, and exchange rates but also their empirical aspects respectively. The proceeding section lays out the econometric analysis of the study. As for Section 4, it first reports the estimation results, and then justifies them. Section 5, the final section, summarizes and concludes.