01918cas a2200265 a 4500 AALejournalIMF000288 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451841596 1018-5941 BD-DhAAL BD-DhAAL Ucer, E. Fiscal Imbalances, Capital Inflows, and the Real Exchange Rate : The Case of Turkey / E. Ucer, C. McDermott, Pierre-Richard Agenor. Washington, D.C. : International Monetary Fund, 1997. 1 online resource (31 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the links between fiscal policy, capital inflows, and the real exchange rate in Turkey since the late 1980s. After an overview of recent macroeconomic developments in Turkey, a vector autoregression model is estimated linking government spending, interest rate differentials, capital inflows, and the temporary component of the real exchange rate. Positive shocks to government spending and capital inflows lead to an appreciation of the temporary component of the real exchange rate, whereas positive shocks to the uncovered interest rate differential lead to a capital inflow and an appreciation of the temporary component of the real exchange rate. The findings highlight the role of fiscal adjustment in restoring macroeconomic stability. Mode of access: Internet Agenor, Pierre-Richard. McDermott, C. IMF Working Papers; Working Paper ; No. 1997/001 Full text available on IMF http://elibrary.imf.org/view/journals/001/1997/001/001.1997.issue-001-en.xml IMF e-Library