Yönetim ve Ekonomi (Jan 2005)
Effectiveness of Fiscal Spending: Crowding out and/or crowding in?(Kamu Harcamalarının Etkinliği: Dışlama (crowding out) etkisi ve/veya crowding in etkisi?)
Abstract
While the neoclassical school advocates that private investment is dampened by an increase in fiscal spending, an increase in the government spending stimulates private investment in the Keynesian model. The Ricardian Equivalence theorem argues that increases in deficit financed by fiscal spending leave private spending unchanged (Bahmani-Oskooee, 1999: 634). This study analyses the effectiveness of fiscal policy in the context of crowding out hypothesis for Turkey. Johansen cointegration test results verify both the Keynesian and neoclassical views for Turkey. While increases in government spending are found to crowd in private investment, government deficits are found to crowd it out.
