Empirical Analysis of Budget Deficits

In this study, the sustainability of budget deficit in turkey tested with a bounds testing approach by using monthly data 1987-2010 period. following empirical findings were reached in the study investigating three sub-term and full-term. determined that budget deficits are sustainable in weak form the periods of 1987:01-1994:03, 1994:04-2001:01 and 1987:01-2010:12, but it is sustainable in strong form the period of 2001:02-2010:12. as a result of causality analysis made according to error correction model, budget revenues are the cause of budget expenditures.