The Triangle of Public Expenditures, Public Sector Deficits, and the Informal Economy: The Case of Türkiye

Authors : Ayşe Atılgan Yaşa, Nazlı Keyifli Şentürk

Pages : 55-72

Doi:10.17233/sosyoekonomi.2026.01.03

View : 248 | Download : 241

Publication Date : 2026-01-31

Article Type : Research Paper

Abstract :The informal economy poses a significant challenge to the effectiveness of public finance policies worldwide. Reducing tax revenues raises public sector deficits and complicates the financing of public services, while increasing public expenditures and expanding public sector deficits are also encouraged. This study employs Wavelet Coherence Analysis to examine the relationships among public spending, public sector deficits, and the informal economy in Türkiye from 1990 to 2020. The results reveal that public expenditures and public sector deficits, both individually and collectively, influence the informal economy, while the growth of the informal economy lessens the impact of both.
Keywords : Kamu Harcamaları, Kamu Kesimi Açıkları, Kayıt Dışı Ekonomi, Wavelet Uyum Analizi

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