PUBLIC DEBT SUSTAINABILITY IN THEORY: TURKISH EXPERIENCE
Public debt management is a very special niche area within public finance that can connect fiscal policy with monetary policy and helps to understand the implications of any policy links between financial sectors and real sectors of the economy. Public debt has played a critical role in many governments’ economic life. During economic and political crisis, public debt is often either the cause or result. OECD Sovereign Borrowing Outlook 2017 gives a framework for showing the advanced economies gross public debt as a percentage of GDP through 19th century till today. It is very striking that the current debt levels of the advanced economies are the same as in the World War II. Until the previous decade, Turkey has been consistently forced into paying the external debt as a result of the combination of loose monetary and fiscal policies. The aim of this study, based on Turkish case, is to show how its public debt has become more sustainable recently by analyzing the role of macroeconomic policies. Besides, we indicate the steps taken in risk management and debt sustainability ensured driving power of structural transformation of Turkish economy. In the view of such information, Turkish experience for managing the previous economic and political crisis and current debt problem are considered.