Effect of financial rule on macroeconomic performance: Turkey case

Fiscal policies are key important tools for influencing the economy. These political tools are effective for overcoming recession and economical over-heating by shaping the current economic situation. Debates on the rule-based or voluntary implementation of fiscal policy have come. With the importance of the concept of fiscal discipline, interest in the fiscal rule, in other words, fiscal policy has increased. Fiscal discipline is key to achieving stability. Macroeconomic stability deteriorates when fiscal discipline is not achieved. The aim of this dissertation is to demonstrate the importance of fiscal discipline in providing macroeconomic stability. In the first two chapters, financial policy, fiscal rule and fiscal discipline were examined by theoretical analysis. In the last part, the effect of fiscal discipline on macroeconomic performance was tested by impulse- response analysis.