Quantitative Approaches to Fiscal Sustainability Analysis: A Case Study of Turkey Since the Crisis of 2001

Posted: 17 Mar 2009

See all articles by Nina Budina

Nina Budina

World Bank

Sweder van Wijnbergen

Universiteit van Amsterdam; Tinbergen Institute; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Date Written: 2009

Abstract

This case study of fiscal sustainability in Turkey after the crisis in 2001 reviews and extends quantitative approaches to fiscal sustainability analysis and brings them together in a user-friendly tool applicable in a data-sparse environment. It combines a dynamic simulations approach with a steady-state consistency approach. It also incorporates user-defined stress tests and stochastic simulations to deal with uncertainty. And it derives the future distribution of debt-output ratios, evaluating the fiscal adjustment required to stabilize them. Value at Risk analysis shows that considerable risks remain unless explicit feedback rules from debt surprises to the primary surplus are implemented.

Keywords: E61, E62, F34, C15

Suggested Citation

Budina, Nina and van Wijnbergen, Sweder, Quantitative Approaches to Fiscal Sustainability Analysis: A Case Study of Turkey Since the Crisis of 2001 (2009). The World Bank Economic Review, Vol. 23, Issue 1, pp. 119-140, 2009. Available at SSRN: https://ssrn.com/abstract=1360045 or http://dx.doi.org/lhn011

Nina Budina (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

Sweder Van Wijnbergen

Universiteit van Amsterdam ( email )

Roetersstraat 11
Amsterdam, 1018 WB
Netherlands
+31 20 525 4011 / 4203 (Phone)
+31-35-624 91 82 (Fax)

Tinbergen Institute

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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