11 AB ÜLKESİNDE BÜTÇE AÇIĞI VE ENFLASYON: YUMUŞAK GEÇİŞLİ PANEL REGRESYON MODELLEMESİNDEN YENİ BİLGİLER

Year 2024, Volume: 26 Issue: 46, 486 - 501, 30.06.2024

Gökhan Çobanoğulları

Abstract

1970'lerden bu yana gelişmiş ülkelerde gözlenen kalıcı bütçe açıkları ve enflasyon oranlarındaki sürekli artış, önemli küresel ekonomik endişelere yol açmıştır. Bu durum hem akademik hem de siyasi çevrelerin bütçe açığı finansmanına odaklanmasına neden olmuştur. Önceki çalışmalar bütçe açığı ve enflasyon arasındaki ilişkinin doğrusal olduğunu kabul etmiştir. Ancak bu çalışma, bütçe açığı ve enflasyon arasındaki ilişkinin doğrusal olmadığını öne sürmektedir. Bu çalışmanın amacı, yeni bir teknik olan Panel Düzgün Geçişli Regresyon Modeli (PSTR) kullanarak, 1997-2016 yılları arasında 11 AB ülkesinde farklı siyasi istikrar seviyelerindeki çeşitli rejimlerde bütçe açığı ve enflasyon arasındaki eşik seviyesini ve asimetrik bağlantıyı araştırmaktır. Ampirik sonuçlar, bütçe açığı arttıkça, özellikle politik risk endeksinin daha yüksek seviyelerinde enflasyon oranının da arttığını göstermektedir. Bu durum 'Tanzi etkisinin' geçerliliğini göstermektedir. Aksine, politik risk endeksinin düşük olduğu ülkelerde, enflasyon oranı arttıkça bütçe açığı azalmakta ve bu da 'Patinkin etkisi'nin geçerliliğini göstermektedir.

Keywords

Yumuşak Geçişli Panel Regresyon Modeli, Bütçe Açıkları, Enflasyon, Politik Risk Endeksi, 11 AB Ülkesi

BUDGET DEFICIT AND INFLATION IN 11 EU COUNTRIES: NEW INSIGHTS FROM PANEL SMOOTH TRANSITION REGRESSION MODELING

Abstract

The persistent increase in permanent budget deficits and inflation rates observed in developed nations since the 1970s has raised significant global economic concerns. This has prompted both academic and political communities to focus on deficit financing. Previous studies have considered the relationship between budget deficit and inflation to be linear. However, this study posits that the association between the two variables is nonlinear. This study aims to examine the threshold and asymmetric relationship between budget deficit and inflation across different political stability levels in 11 EU countries from 1997 to 2016, using the innovative Panel Smooth Transition Regression Model (PSTR). Empirical results indicate that as the budget deficit increases, the inflation rate rises, especially at a higher political risk index, validating the “Tanzi effect”. Conversely, in the low political risk index, as inflation rises, the budget deficit decreases, validating the “Patinkin effect”.

Keywords

Panel Smooth Transition Regression, Budget Deficit, Inflation, Political Risk Index, 11 EU Countries

References

• Agnello, L. and Sousa, R. M. (2009). The Determinant of Public Defcit Volatility. Working Paper Series, No. 1042. European Central Bank, Frankfurt.
• Akçoroğlu, A. ve Yurdakul, F. (2004). Siyasal Ekonomi Açısından Büyüme, Enflasyon ve Bütçe Açıkları: Türkiye Üzerine Bir Uygulama. Ankara Üniversitesi SBF Dergisi, 59(1). 1-25.
• Alesina, A. and Perotti, R. (1995). The Political Economy of Budget Deficits. Staff Papers, 42(1), 1-31.
• Alesina, A., Hausmann, R., Hommes, R. and Stein, E. (1999). Budget Institutions and Fiscal Performance in Latin America. Journal of Development Economics, 59(2), 253-273.
• Alt, J. E. and Lassen, D. D. (2006). Transparency, Political Polarization, and Political Budget Cycles in OECD Countries. American Journal of Political Science, 50(3), 530-550.
• Anderson, L. C. and Jordan, J. L. (1968). Monetary and Fiscal Actions: A Test of Their Relative Importance in Economic Stabilization. Federal Bank of St. Louis Review, 50, 11023.
• Arif, A. and Hussain, M. (2018). Economic, Political and Institutional Determinants of Budget Deficits Volatility: A Panel Data Analysis. International Journal of Economics and Business Administration, 6(3), 98–114.
• Baron, D. P. and Ferejohn, J. A. (1989). Bargaining in Legislatures. American Political Science Review, 83(4), 1181-1206.
• Boariu, A. and Bilan, I. (2007). Inflationary Effects of Budget Deficit Financing in Contemporary Economies. Romania: Alexandru Ioan Cuza University.
• Breusch, T. S. and Pagan, A. R. (1980). The Lagrange Multiplier Test and Its Applications to Model Specification in Econometrics. The Review of Economic Studies, 47(1), 239-253.
• Cardoso, E. (1998). Virtual Deficits and the Patinkin Effect. Staff Papers, 45(4), 619-646.
• Colletaz, G. and Hurlin, C. (2006). Threshold Effects in the Public Capital Productivity: An International Panel Smooth Transition Approach. Document de Recherche du Laboratoire d'Economie d'Orléans, 2006-1.
• Cochrane, J. H. (2018). Stepping on a Rake: The Fiscal Theory of Monetary Policy. European Economic Review, 101, 354-375.
• De Haan, J., Jong-A-Pin, R. and Mierau, J. O. (2013). Do Budgetary Institutions Mitigate the Common Pool Problem? New Empirical Evidence for the EU. Public Choice, 156, 423-441.
• Eita, J. H., Manuel, V., Naimhwaka, E. and Nakusera, F. (2021). The Impact of Fiscal Deficit on Inflation in Namibia. Journal of Central Banking Theory and Practice, 10(1), 141-164.
• Erkam, S., & Çetinkaya, M. (2014). Budget Deficits and Inflation: Evidence from Turkey. The Macrotheme Review, 3(8), 12-22.
• Fischer, S., and Easterly, W. (1990). The Economics of the Government Budget Constraint. The World Bank Research Observer, 5(2), 127-142.
• Fouquau, J., Hurlin, C. and Rabaud, I. (2008). The Feldstein–Horioka Puzzle: A Panel Smooth Transition Regression Approach. Economic Modelling, 25(2), 284-299.
• Friedman, M. (1956). The Quantity Theory of Money: A Restatement. M. Friedman (Ed.), The Quantity Theory of Money içinde (ss. 1-40). Chicago: University of Chicago Press.
• Friedman, M. (1970). The Counter-Revolution in Monetary Theory. G. E. Wood (Ed.), Explorations in Economic Liberalism: The Wincott Lectures içinde (ss. 3-21). London: Palgrave Macmillan UK.
• González, A., Teräsvirta, T., and Van Djik, D. (2005). Panel Smooth Transition Regression Models. Paper presented at the SSE/EFI Working Paper (No. 604).
• González, A., Teräsvirta, T., van Dijk, D., and Yang, Y. (2017). Panel Smooth Transition Regression Models. Paper presented at the SSE/EFI Working Paper Series in Economics and Finance.
• Hansen, B. E. (2000). Sample Splitting and Threshold Estimation, Econometrica, 68, 575–603.
• Hsiao, C. (1986). Analysis of Panel Data (1st ed.). New York: Cambridge University Press.
• Imbeau, L. M. and Chenard, K. (2002). The Political Economy of Public Deficits: A Review Essay/European Public Choice Society. In Annual Conference, Belgirate.
• Javid, A. Y., Arif, U. and Arif, A. (2011). Economic, Political and Institutional Determinants of Budget Deficits Volatility in Selected Asian Countries. The Pakistan Development Review, 649-662.
• Krogstrup, S., and Wyplosz, C. (2010). A Common Pool Theory of Supranational Deficit Ceilings. European Economic Review, 54(2), 269-278.
• Leeper, E. M. (1991). Equilibria Under ‘Active’and ‘Passive’ Monetary and Fiscal Policies. Journal of Monetary Economics, 27(1), 129-147.
• Lipsey, R. G. (1960). The Relation Between Unemployment and the Rate of Change of Money Wage Rates in the United Kingdom, 1862-1957: a further analysis. Economica, 1-31.
• Makochekanwa, A., (2008). Impact of Budget Deficit on Inflation in Zimbabwe. MPRA Paper No 24227 1-22. https://mpra.ub.uni-muenchen.de/id/eprint/24227
• Moon, H. R. and Perron, B. (2004). Testing for a Unit Root in Panels with Dynamic Factors. Journal of Econometrics, 122(1), 81-126.
• Nordhaus, W. (1975). The Political Business Cycle. Review of Economic Studies, 42(2), 169–190.
• Patinkin, D. (1993). Israel's Stabilization Program of 1985, or Some Simple Truths of Monetary Theory. Journal of Economic Perspectives, 7(2), 103-128.
• Persson, T. and Svensson, L. E. (1989). Why a Stubborn Conservative Would Run a Deficit: Policy with Time- İnconsistent Preferences. The Quarterly Journal of Economics, 104(2), 325-345.
• Pesaran, M. H. (2007). A Simple Panel Unit Root Test in the Presence of Cross‐Section Dependence. Journal of Applied Econometrics, 22(2), 265-312.
• Raza, S. A., Shah, N. and Khan, K. A. (2020). Residential Energy Environmental Kuznets Curve in Emerging Economies: The Role of Economic Growth, Renewable Energy Consumption, and Financial Development. Environmental Science and Pollution Research, 27, 5620-5629.
• Roubini, N. and Sachs, J. D. (1989). Political and Economic Determinants of Budget Deficits in the İndustrial Democracies. European Economic Review, 33(5), 903-933.
• Sargent, T. J. and Wallace, N. (1981). Some Unpleasant Monetarist Arithmetic. Federal Reserve Bank of Minneapolis Quarterly Review, 5(3), 1-17.
• Seghezza, E. (2022). The Cagan's Model, Its Developments, and the Patinkin Effect. International Economics/Economia Internazionale, 75(4).
• Sims, C. A. (2011). Stepping on a Rake: The Role of Fiscal Policy in the Inflation of the 1970s. European Economic Review, 55(1), 48-56.
• Ssebulime, K. and Edward, B. (2019). Budget Deficit and Inflation Nexus in Uganda 1980–2016: A Cointegration and Error Correction Modeling Approach. Journal of Economic Structures, 8(1), 1-14.
• Tanzi, V. (1978). Inflation, Real Tax Revenue, and the Case for Inflationary Finance: Theory with an Application to Argentina. Staff Papers-International Monetary Fund, 417-451.
• Telatar, F. (2004). Politik İktisat Politikası. Ankara: İmaj yayınevi.
• Terrones, M. M. and Catão, M. L. (2003). Fiscal Deficits and Inflation. International Monetary Fund.
• Turgut, E., ve Uçan, O. (2019). Yolsuzluğun Vergi Oranları ile olan İlişkisinin OECD Ülkeleri Örnekleminde İncelenmesi. Niğde Ömer Halisdemir Üniversitesi Sosyal Bilimler Enstitüsü Dergisi, 1(3), 1-17.
• Velasco, A. (2000). Debts and Deficits with Fragmented Fiscal Policymaking. Journal of Public Economics, 76(1), 105-125.
• Von Hagen, J. and Harden, I. J. (1995). Budget Processes and Commitment to Fiscal Discipline. European Economic Review, 39(3-4), 771-779.
• Weingast, B. R., Shepsle, K. A. and Johnsen, C. (1981). The Political Economy of Benefits and Costs: A Neoclassical Approach to Distributive Politics. Journal of Political Economy, 89(4), 642-664.