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    How much will Turkey’s economy contract in 2009 (1)?
    Fatih Özatay, PhD 02 March 2009
    What will be the rate of economic contraction for Turkey in 2009? This question can certainly be answered by naming any figure. However, then, it is necessary to answer why will the rate be exactly 'that' figure, not lower or higher. It is necessary to enumerate the rationale for the contraction prospects so that it can be discussed whether they are realistic or not. A way of answering this question is employing a technical model. The most basic model will include the sup components of the national income (such as consumption, investment, exports and imports). Then, a series of technical calculations will be made based on the determinants of the components and their impacts on the components. In the current environment, the candidates for major determinants of components like consumption, [More]
    Hand in hand against the crisis
    Fatih Özatay, PhD 01 March 2009
    The economic program that has to be designed to tackle the crisis must involve many measures. A part of the measures are related to credit guarantee system which is required to ensure the operation of both foreign exchange and TL credits, which are currently blocked. Since the end of October, I have written several columns on how the system can work. In addition, the think-tank I work at, TEPAV published several notes on this issue. I observe that, in the recent period, some columnists as well as prominent names of political parties, for instance such as CHP leader Deniz Baykal, are considering the system as an important solution advisories. And this makes me really happy as the ultimate aim of the recommendations involved in this column is initiating an important discussion on the recomme [More]
    A new recommendation to tackle the crisis (3)
    Fatih Özatay, PhD 26 February 2009
    I believe that the need for an integrated approach against the crisis is apparent. Despite this, however, the current administration has always done 'piecework' until now: That decision two months ago, this decision two months later... This does not have a confidence-building impact. What is more, since the decisions are not taken under the framework of an economic program by paying regard to consistency, the funds that might improve growth and employment when allocated for a different area are wasted in less-efficient areas. So to speak, arms are wasted for nothing. [More]
    What kind of a thinking shall be employed about the crisis?
    Güven Sak, PhD 26 February 2009
    We are in the middle of the biggest economic crisis of the era and we are still confused. There are two dominant approaches: The former desperately argues that there is not enough internal space of action to overcome the disaster that originated externally. A deep "no way embarrassment" can easily be observed in this approach. It assumes a sort of "who we are to deal with this huge disaster alone" attitude can be noticed. The second approach on the other hand assumes a much more hopeful attitude. It first enumerates what can be done. Then, it serves that evil question:  "Do we have the resources to accomplish those?" and a deep silence spreads around. Again the "no way embarrassment" takes the lead. The way to overcome the crisis is to overcome this dilemma. There are measures to take. Eac [More]
    How shall the corporate sector respond to the crisis? First challenge is the ‘You do not say embarrassment’
    Güven Sak, PhD 24 February 2009
    We are living the deepest and most far reaching crisis of the world history. The crisis is approaching our shores in full flood. Did you notice the emphasis: It has not arrived yet, it is to arrive. So, what shall be done in such an environment? What kind of an attitude shall be assumed in particular by the corporate sector? There exist a number of views with this respect starting with the importance of being innovative and ending with defining the opportunities created by the crisis in the right time. But one thing is obvious: it is crucial to make a move forward and act differently than the past. But, in our case, it is not so. In the process we are in, it is more important to avoid making a move. Let us state it clearly: It is time to get through the day without facing any trouble rathe [More]
    A new recommendation to tackle the crisis (2)
    Fatih Özatay, PhD 23 February 2009
    In an environment where no one trusts another, credit channels are naturally obstructed. However, we have to make the credit channels work as soon as possible to slow down the economic contraction and ensure recovery. We need a mechanism that will decrease risk perception of banks (that will diminish the inconfidence in the corporate sector) so that the banks will not act reluctant in extending credits. A third party to intermediate between the bank and the company gives an opportunity to fulfill this aim. Guarantee system My suggestion as I frequently touched upon since October 20, 2008 had the potential to ensure the functioning of TL credit channel. The fund to be established by means of the resources to be allocated from the budget (up to 0.8 percent of the national income) would pr [More]
    A new recommendation to tackle the crisis
    Fatih Özatay, PhD 22 February 2009
    Both domestic and foreign credit channels came near to a halt. If the credit channels do not start working again, Turkish economy will contract significantly. I have discussed many times in this column what can be done to prevent this. The first recommendation was enabling the credit channel to function through the credit guarantee fund. [More]
    What is that smell over the Balkans this time?
    Güven Sak, PhD 21 February 2009
    In 1930s, Rebecca West writing about the Balkans said "I hate the corpses of empires, they stink as nothing else." Back in that decade, Austria-Hungary Empire and the Ottoman Empire had just collapsed. The Balkans was in chaos, just like today. It seems that the smell of a closed era have spread all over the Balkans. Just as West said, the smell in the air is unbearable. Nowadays, the Balkans lives in the economic crisis climate. With this economic crisis, the global crisis has for the first time attained a different feature unique for countries like Turkey. We have to follow up the developments in the Balkans attentively, for three reasons. Let us first see what is going on in the Balkans nowadays. [More]
    Does the bullet always draw?
    Fatih Özatay, PhD 19 February 2009
    Characters in Wild West comics are charmed. In general, the bullets draw their body. Bullets are newer pointed at mortal points, even in the bar battles where guns are fired from a very close distance. The right opposite can of course be seen, though rarely. For instance, Kit Carson, old friend of Tex Willer, who one of the rare Redskin-friendly Wild West characters, was shot from the right shoulder and laid up for a couple of days. Tex had to do the entire 'cleaning' job. I have read numerous issues of the comics, but all the bullets bore a hole in their hats and result in complaints like "Oh! This was my new hat".  Readers were complaining "This is too much to be real". Thank God, a good surprise was made for the readers and the bullet did not draw. [More]
    Is it licit that banks are restructured by bank managers?
    Güven Sak, PhD 19 February 2009
    The answer is: No, it is not. Let us see why. The main problem of our world, nowadays, is that, it has not changed despite a whole year passed. The source of the problem is the US banks. It is necessary to do a comprehensive cleaning in the balance sheets of banks. Comprehensive cleaning operation has not been launched yet. Under these circumstances, banks fail to function. When the banking system fails to function, plans designed to boost consumption fails to be effective from the very beginning. Then, it is crucial to ensure that the banking sector restarts functioning before focusing on the measures required to boost consumption. The current state of affairs in the US carried the discussions to the following point: "Is it possible that banks are restructured by bank managers?" And the a [More]