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External Debt: Some Experience From Turkish Economy

Author(s): Zahoor Hussain Javed | Ahmet Sahinoz

Journal: Journal of Applied Sciences
ISSN 1812-5654

Volume: 5;
Issue: 2;
Start page: 363;
Date: 2005;
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Keywords: External debt | debt | growth | investment | export | turkey

The study pin downs vital role of the emerging field of external debt and debt indicators in Turkish economy with emphasis on empirical relationship of external debt, debt indicators between growth, investment and exports over the period 1983-2002. Present results suggest that the substantial raise in the stock of external debt put negative effect on investment, positive effect on exports and has no effect on growth. Present results imply that if policy maker wants to increase social welfare and growth, then it may be necessary to endow the political, military and social environment with appropriate enforcement devices with respect to the economy`s targets, choices and preferences. Results suggests that external debt and debt indicators has low effect on the improvement of Turkish economy, which is dominantly, influenced by political authorities and bureaucracy. In nut shell, the conclusion supports the idea that the setting of external debt by authorities must be disciplined which, in some instances is possibly over ruled by the structural adjustment programmes, which can remove economic distortion, accelerate exports, growth and encourage external debt management.
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