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Article Fiscal Policy and Long-Run Inflation Dynamics: Evidence From a Major Emerging Market Economy(Routledge Journals, Taylor & Francis Ltd, 2025) Ekinci, Mehmet Fatih; Saygili, Huelya; Yilmaz, Hakki HakanThis study examines the long-run aspects of fiscal policy on inflation in T & uuml;rkiye, using a multivariate co-integration approach with quarterly data from 2006Q1 to 2024Q2. A key contribution of the study lies in its emphasis on the long-run dynamics between various budgetary policy instruments and inflation. We find no significant long-run relationship between inflation and fiscal policy measured at the aggregate level such as budget balance, total expenditures, and revenues. However, examining the specific components, we find statistically significant long-run positive relationships between inflation and indirect taxes - particularly the special consumption tax - and operational government expenditures. Recursive estimates suggest that the relationship between inflation and fiscal instruments has strengthened since 2021 when T & uuml;rkiye started to experience a high inflation episode diverging from global inflation trends with a deterioration in public finance performance. These findings align with the fiscal theory of price level, as the theory implies that persistent fiscal deficits without credible plans for future surpluses can lead to sustained inflationary pressures.Article Citation - WoS: 1Citation - Scopus: 1Effectiveness of Macroprudential Policies on Credit Surge and Stop Episodes(Springer, 2024) Ekinci, Mehmet Fatih; Kenc, Turalay; Tezcan, Unay TamgacWhen faced with capital flow and credit growth waves in recent years, policymakers have relied upon macroprudential regulation. This paper sheds light on a relatively less-analyzed policy issue: how macroprudential regulatory measures mitigate extreme credit growth episodes. We use a dynamic panel data approach to estimate the impact of MaPPs on credit growth volatility and the likelihood of credit growth boom and bust episodes. We find that MaPPs reduce credit growth volatility in both advanced economies (AEs) and emerging market economies (EMEs). In addition, MaPPs help to prevent credit surges in EMEs and stops in AEs. Our results show that there is a strong link between net capital flows and credit growth stop episodes. Net capital flow surges trigger a credit surge for EMEs. This suggests that policymakers should consider both MaPPs and capital flow management measures when designing policies to mitigate the risks associated with these phenomena.
