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Journal of Applied Sciences
  Year: 2005 | Volume: 5 | Issue: 2 | Page No.: 220-226
DOI: 10.3923/jas.2005.220.226
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Interaction of Monetary and Fiscal Policy in Case of Turkey

Zahoor Hussain Javed and Ahmet Sahinoz

This study chalks out the emerging field of interaction of monetary and fiscal policy and the instruments which play vital role to shape it. It also shows empirical relationship between monetary and fiscal policy over period 1993-2002. Present analysis suggested that, the treasury and national authorities have conflicting incentives, targets and objectives, depending upon relative size of internal and external disturbances. Present results imply that if monetary authority wants to increase social welfare, then it may be necessary to endow the monetary authority with appropriate enforcement devices with respect to the fiscal policy`s targets and preferences. Hence, present conclusion supports the idea that the setting of internal balance by fiscal authorities to be disciplined and in some instances possibly over ruled by monetary authority. In sum, actions of the Turkish monetary policy appear to have substantially been influenced by fiscal authorities and decisions of government of that time.
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How to cite this article:

Zahoor Hussain Javed and Ahmet Sahinoz , 2005. Interaction of Monetary and Fiscal Policy in Case of Turkey. Journal of Applied Sciences, 5: 220-226.

DOI: 10.3923/jas.2005.220.226






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