Abstract:

The financial policy, along with monetary policy, plays an important role in the economy in ensuring andining macroeconomic stability. Therefore, it is important that these policy components can be used effectively. This study aims to examine the long-term impact of public sector budget disadvantages on inflation in Turkey. In this context, the ARDL limit test was implemented using three-month data for the 2006-2019 period. The results of the ARDL border test indicate that the public sector budget gap in Turkey has a long-term impact on inflation. This result is consistent with theoretical expectations and shows that financial policy tools are effective in ensuring andining price stability in Turkey and that these policy tools should be used effectively.

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