Özet:

The public sector borrowing requirement (PSBR) is defined as the difference between all government revenues and all government expenditures, which can only be met by borrowing or printing money. The ratio of this deficit to GDP is a more important indicator than its absolute value. A high ratio may lead the government to borrow from the capital market. An increase in the demand for borrowable resources leads to an increase in interest rates. Closing the PSBR through money printing, on the other hand, results in an increase in inflation and interest rates. The inflation process is not independent from the time preference and political priorities of the public sector and resource allocation. Public policies are the main determinant of macroeconomic dynamics. In countries with weak fiscal systems and narrow tax bases, the state relies more on seigniorage and inflation taxes as a source of revenue. In today's economic structure, such revenues and budget deficits are the main determinants of monetary policy. The budget deficits that emerged after the pandemic and the expectation that these budget deficits would not be covered by future budget surpluses reduced the returns on public monetary assets and caused the public sector to run more deficits. This is the main reason for both the increase in exchange rates and the rise in inflation expectations for the Turkish economy. The aim of this study is to analyze the relationship between seigniorage revenue, public sector borrowing requirement and inflation in Turkey between 2008 and 2022.

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