How Effective is the Asymmetric Structure on the Pathway to Fiscal Sustainability? Rethinking on Türkiye

Abstract

The aim of the paper is to analyze the fiscal sustainability in Turkiye with empirical methods using data for the period 1960-2022. In this context, public revenue, public expenditure and public debt variables are analyzed with conventional and quantile tests. In particular, the FNQKS test, which can model non-normal distribution, nonlinearity and structural breaks together, provides a comprehensive analysis of fiscal sustainability. Moreover, the QCR quantile cointegration approach tests fiscal sustainability through the relationship between public revenues and public expenditures. According to the results, contrary to conventional methods, quantile findings reveal the existence of an asymmetric fiscal sustainability in Turkiye. The paper differs from the literature by utilizing methodological innovations and offers a new perspective on fiscal sustainability.