DEBT TARGETS AND FISCAL RULES PRACTICES ON PUBLIC DEBT FOR TURKEY

Abstract

Debt targets act as an anchor of fiscal policies and ensure the sustainability of fiscal policy, provide a sufficient policy room for the economic stabilization policies in order to challenge adverse shocks. Prudent debt targets decrease the risk premia and cost of the active fiscal policies by ensuring the environment of confidence which the markets need. Prudent debt targets are set according to the economic situation of countries and in the frame of fiscal rules. For the purpose of obtaining results in compliance with these targets, fiscal rules have two main objectives. The first objective is contributing fiscal discipline and the second one is enabling the stabilization policies. However, achieving these targets is not only subject to debt-related fiscal rules. Expenditures revenues related to fiscal rules have to be used in harmony with the debt related fiscal rules. In our study, we are going to try to ask these questions; what are the prudent debt targets for the short-mid and long terms, how to design fiscal rules and general fiscal framework to survive economic fluctuations. These questions will be tried to answer in the frame of the public debt performance and traditional fiscal policies of Turkey. In this study, a set of policy offers will be tried to developed to provide a functional role for the living through Turkey from the current economic fluctuation with the independent economic stabilization policies.