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    Fasten your seatbelts, please
    Güven Sak, PhD 25 February 2011
    In the light of the Libya incident we must expect that not only will the current account deficit grow, but also that it will become more difficult to finance. "I believe that we are riding faster than the car and the road conditions allow." I wrote this last Tuesday to illustrate my understanding of the latest monitoring note of the IMF on Turkey. Since then, the dangerous trend of the current account deficit has become clearer. The challenge is even more serious with the recent developments in Libya. The movements in the Arab streets seem to have the potential to make the structural imbalances in Turkey's economy more evident. The concerns of the Gadafi's made-up state will strain Turkey in economic terms. Let us discuss what we can expect. [More]
    Gender imbalance brings macroeconomic imbalance
    Güven Sak, PhD 22 February 2011
    As studies reveal, the gender ratio imbalance in China plays an important role in shaping the macroeconomic imbalances in the country. I think this was world imbalance review week. We heard news on imbalances both from Paris and Washington. One was about China and the other one was about Turkey. If you wonder what the imbalances of the week are, please read on. [More]
    Why are we the only ones who witness such developments?
    Güven Sak, PhD 18 February 2011
    Egypt was the eighth best performing country among the 135 countries. Turkey is the twenty-fifth. Which countries have demonstrated the best performance with respect to human development over the last 4 decades? I had skipped this until I came across an article on Dani Rodrik's web site yesterday. Then I read the 2010 Human Development Report (HDR). Hang on to your hat: six out of ten countries that have ensured the most rapid improvement in the life standards of their citizens over the last four decades are Arab countries: Oman, Indonesia, Saudi Arabia, Tunisia, Morocco and Algeria. If you wonder what is it that has thrown off-balance the entire geography from Tunisia to Egypt and than to Libya, Yemen, Jordan, Palestine and finally Iran, you can now stop doing so. What has shaken those co [More]
    Egypt will be a role model for Turkey
    Güven Sak, PhD 15 February 2011
    We are on the bottom rung yet. I believe that the developments in Egypt will affect Turkey, too. Unprecedented movements have been observed in both Tunisia and Egypt. Opinions claiming that "Turkey is the model country now" really amuse me. I am not of that opinion. I believe that Egypt will be a role model not only for Turkey, but for the entire world. Let me tell you why.  What has been the determinant trend of the last two decades? [More]
    Children of globalization are the new kids at Tahrir Square
    Güven Sak, PhD 11 February 2011
    This time the rebels are not dispossessed. It seems that the winds have changed. Yesterday they were carrying on protests and blowing whistles in a civilized way in Ankara and Istanbul. Today they set up camp in Cairo in Tahrir square. The children of globalization are on the go. In the past, dispossessed used to rebel. Today those on the streets are not dispossessed. Globalization is like a box of nails and the generations nurtured by it have started shaping the world. This is how I read the recent events unfolding in Egypt. [More]
    One eats, the other watches: without fail, eventually a crisis erupts.
    Güven Sak, PhD 08 February 2011
    In this age  during which what one person eats can be seen easily and immediately by the other, what the Left has been saying for decades is proved even more correct. The IMF finally has come around to what the Left has been arguing for decades. Yes, and now for a new work by the IMF: One eats, one watches, and from that all Hell breaks loose. Can the global crisis be the outcome of the unequal income distribution that was reinforced in the period preceding the crisis? An IMF study published in late 2010 answers this question positively in general. The research emphasizes that given the cost of the crisis; it would have been wise to implement income redistribution policies before the crisis. This is exactly what the Left has been arguing for years. What is this? What does it imply? How can [More]
    What else could the Central Bank do?
    Güven Sak, PhD 04 February 2011
    It is yet too early to talk about the other dimension of the issue; that is, whether the credit expansion has been halted. If the objective is to be met, the signals of a slowdown in the credit expansion must become visible soon. [More]
    Doing much, talking less
    Güven Sak, PhD 01 February 2011
    The skills China demonstrates in managing its growth process are impressive. On Thursday, the Year of Rabbit will begin in the Chinese horoscope. On the eve of a new year, would you like to compare how Turkey and China look from an objective point of view? I do not know why, but I see - or hear, let us say - two different political styles. On the one hand is China, which accomplishes ten tasks, but talks casually about just one of them. On the other hand is Turkey, which pretends to have accomplished one task reluctantly, but then speaks in a tone as if tens tasks have been completed. This is surprising. What is the underlying cause of this? If you wonder, please read on. [More]
    The Turkish Commercial Code would not have been passed without the alliance of Erdoğan, Kılıçdaroğlu and Bahçeli.
    Güven Sak, PhD 28 January 2011
    The Parliament has fulfilled its duty, now the administration is being watched closely. Turkey's agenda should be composed of unemployment and economic performance. Turkey is an interesting country. Do you know the Chinese curse, "May you live in interesting times"? The case here in Turkey is just the same. Just when you are thinking that nothing will happen until the end of the elections and that no reforms will be initiated until 2015, a step in the right direction comes. Thank God not all surprises are bad. The nice surprise of the recent period has been the amendment of the Turkish Commercial Code (TCC). We should be thankful for this. With this amendment the path for change in the corporate sector has been paved. Turkey still needs some time to design star sectors, but the way to iden [More]
    Sales of the iPhone increase the current account deficit of the US
    Güven Sak, PhD 25 January 2011
    Then, in this milieu attempting to manufacture a Turkish automobile will not remedy but will even elevate current account deficits. The Turkish Prime Minister recently spoke at a TUSIAD (Turkish Industrialists' and Businessmen's Association) meeting. He called on the industrialists to manufacture a Turkish automobile. We all loved the idea; it sounded great. But when you sit down and think it through, things are not as they seem. If you design a Turkish brand, the current account might not decrease but increase, for instance. Then, deal with the economic columnists of certain media circles who do not get economics, if you can. They will immediately label those with critical opinions traitors and you will have nothing to do but get prepared for the trouble. On what is my argument based? It [More]