The Effect of Public Expenditures and Tax Revenues on Economic Conjuncture: A Case Study for Turkey

The aim of this study is to test the effect of fiscal policy on economic activity in Turkey with Markov regime switching vector autoregressive model (MS-VAR). From this point of view, the effects of changes in fiscal policy on GDP during the economic expansion and contraction and the changes in fiscal policy multipliers over time are examined. In addition, the effectiveness of fiscal policy instruments, which consist of public expenditures and tax revenues, is determined by different regimes. The policy recommendations are developed according to the results