| Summary: | Recently, Turkey has suffered from the increase in its debts and the deficit of current account balance. It has widely been argued whether it is possible for the increase in debts, both domestic and foreign, to turn into a crisis. Using the instruments of the Fiscal Theory of the Price Level, this study aims to determine whether Turkish economy is Ricardian or Non-Ricardian. The study defines the release from the crisis as a transformation from a Non-Ricardian economic structure to a Ricardian one. Dummy variables have been employed in the analysis in order to find out whether there has existed such a transformation through the stability programs implemented since the year 2000. As a result, it has been found that the process of borrowing of Turkey is Non-Ricardian, and Turkey has not got out of the crisis yet.
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