Authors: Ata Ozkaya
Addresses: Department of Economics, Galatasaray University, GIAM, Ciragan Cad. No. 36, 34357 Ortakoy, Istanbul, Turkey
Abstract: In this paper, we develop a comprehensive framework to obtain a 'broad definition' of overall public debt stock accumulation in Turkey. To do this first, we identify 'invisible balance' of public sector incurred from politically backed (informal) off-budget debt-creating transactions among public entities. Then, we compute the stock of hidden liabilities accumulated in the form of persistent deficits of invisible balance from 1989 to 2010. We showed that the overhang of public debt was in play in 2000-2001 crisis episodes. Finally, we analyse both hidden debts and overall debt stock on phase-space and show that debt dynamics follow a chaotic path, generating instability on fiscal structure and increasing vulnerability of the economy to the financial crisis through liquidity squeeze arose in state financial enterprises.
Keywords: fiscal transparency; informal transactions; off-budget debts; financial crisis; phase-space; sustainability; chaos; Turkey; debt stock accumulation; sustainable development; sustainable economies; public sector; invisible balance; hidden liabilities; persistent deficits; public debt; debt dynamics; fiscal structures; instability; liquidity squeeze.
International Journal of Sustainable Economy, 2014 Vol.6 No.4, pp.359 - 380
Received: 23 Dec 2013
Accepted: 22 Mar 2014
Published online: 23 Oct 2014 *