An Empirical Analysis of Debt Policies, External Dependence, Inflation and Crisis in the Ottoman Empire and Turkey: 1830-2005 Period

25 Pages Posted: 23 Dec 2008

See all articles by Melike Bildirici

Melike Bildirici

Yildiz Technical University

Ozgur Omer Ersin

Beykent University - Department of Economics

Elcin Aykac Alp

affiliation not provided to SSRN

Date Written: December 22, 2008

Abstract

The study analyzes the relationship among domestic debt-inflation-domestic debt cost-external debt-external dependency-crisis in the Ottoman Empire and in the Republic of Turkey. The study discusses that the monetary based explanations have not been satisfactory for the period of 1830-2005 especially for the investigated periods with crises and external dependence. The cost of domestic and external debt and various measures of debt and dependence discussed in the study were used to analyze the relationship between external dependence, domestic and external debt, crises, inflation, cost of domestic and external debt, external dependence and crises in accordance with Autoregressive (AR) and Vector Autoregressive Regression (VAR) models. We analyzed the Ottoman Empire in light of inflationary effects of throne changes, wars and crises. Further, the inflationary effects of domestic and external debt are investigated for Turkey in light of the cost of debt, crises and political factors. As our results, increasing political instability has significant explanatory power on inflation. For the periods of increasing debt, the inflationary effects of debt policies are highlighted. The domestic debt-inflation-domestic debt cost-external debt-external dependency-crisis cycle enhances especially during the Decline Period of Ottoman Empire. The analysis also holds for the periods with high costs of debt in Turkey.

Keywords: Inflation, Domestic Debt, External Debt, External Dependence, Crisis, Autoregressive models

JEL Classification: C22, E31, E60, H60

Suggested Citation

Bildirici, Melike and Ersin, Ozgur Omer and Aykac Alp, Elcin, An Empirical Analysis of Debt Policies, External Dependence, Inflation and Crisis in the Ottoman Empire and Turkey: 1830-2005 Period (December 22, 2008). Applied Econometrics and International Development, Vol. 8, No. 2, 2008, Available at SSRN: https://ssrn.com/abstract=1319393

Melike Bildirici (Contact Author)

Yildiz Technical University ( email )

Davutpasa Mh., Esenler
Besiktas, Istanbul 80750
Turkey

Ozgur Omer Ersin

Beykent University - Department of Economics ( email )

Ayazaga Yerleskesi
Ayazaga-Sisli,
Istanbul, Istanbul 34396
Turkey
+902124441997 (Phone)

Elcin Aykac Alp

affiliation not provided to SSRN ( email )

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