Abstract:

This study has studied the asymmetric effects of public domestic debt on income inequality in Turkey. For this purpose, the NARDL (Asymmetrical Delayed Otoregressive) model was preferred, which allows the identification of asymmetrical effects between series using annual data from the period 1980 to 2015. In the context of empirical analysis, income inequality has been used as a dependent variable, and in the framework of the basic explanatory variable, economic growth, foreign direct investments and trade-out-open variables have been used as internal debt and control variables. The results have shown that the relationship between income inequality and public domestic debt is long-term asymmetric and short-term symmetric. A long-term negative shock in public domestic debt has been determined to have statistically meaningful and negative effects on income inequality. In the short term, the result of a reduction in public domestic debt in a similar way has a meaningful and negative impact on income inequality. In short, it has been revealed that the reduction in public domestic debt in Turkey has reduced income inequality.