Empirical analysis of the relationship between public expenditures and inflation in turkey: the period 1990-2015

As a result of living together in society, human being requires a number of needs and they enhanced these needs with the development of society to a great extent. There should be a significant amount of expenditure to fulfil these needs. The expenditures which are made by the government have been increasing over time. The aim of this study is to analyse the relationship between state expenditure and inflation. To determine this relationship, the annual data between 1990-2015 is used. This article includes two different model; univariate-regression analysis and multi-variate regression analysis. The empirical results of univariate regression analysis indicate that inflation rates are positively and significantly correlated with total public expenditure, current expenditures, investment expenditures and transfer expenditures. Similarly, the empirical results of multivariate regression analysis demonstrate that the impacts of current expenditure on inflection rate are positively and statistically significant. On the other hand, there was no statistically strong evidence for investment expenditures and transfer expenditure variables