THE REQUIREMENTS OF FOREIGN BORROWING AND TWO-GAP THEORY: A CASE OF TURKEY

Authors : Ömer EROĞLU, Stephen HEYCOOCK

Pages : 1-32

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Publication Date : 1997-12-31

Article Type : Research Paper

Abstract :This study has examined empirically the need   of foreign borrowing. and foreign debt burfien of Turkey from 1963 to 1995. The two-gap analysis was used to assess the requirements of foreign resources as additional to domestic resources in order to achieve e a reasonable target ground rate of national income. This study has shown   that in the light of two-gap analvsis, foreign aid will still continue to plan a crucial role during the Seventh Five Year Plan period (1996-2000) bv helping to overcome foreign exchange constraints, although it has put Turkev under a large foreign indebtedness. However, as long as the economy keeps its ability to repav foreign debt, it is beneficial for the economic development of Turkey.
Keywords : Economy, foreign Aid, Foreign Debt, Two Gap Analysis, Foreign Exchangeange Coııstraints