How Fiscal (Mis)-Management May Impede Trade Reform: Lessons From an Intertemporal, Multi-Sector General Equilibrium Model for Turkey

Xinshen Diao (), Terry Roe and Erinc Yeldan

No 7459, Bulletins from University of Minnesota, Economic Development Center

Abstract: We utilize a multi-sector general equilibrium model based on intertemporally optimizing agents to study issues of trade liberalization and fiscal adjustments in the context of the Turkish economy. A key feature of the model is its explicit recognition of the distortionary consequences of excessive borrowing requirements of the public sector through increased domestic interest costs. The model results suggest that the postponement of adjustment to growing public debt and fiscal imbalances could be detrimental; and that in the absence of coordinated fiscal reforms, the welfare gains expected from trade liberalization may significantly be negated.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 31
Date: 1998
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: HOW FISCAL MISMANAGEMENT MAY IMPEDE TRADE REFORM: LESSONS FROM AN INTERTEMPORAL, MULTI-SECTOR GENERAL EQUILIBRIUM MODEL FOR TURKEY (1999)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:umedbu:7459

DOI: 10.22004/ag.econ.7459

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