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  • July 2019 (2)

    Unnecessary statements
    Fatih Özatay, PhD 23 July 2011
    Instead of confusing statements, take steps to overcome the mentioned vulnerability, which clearly attracts attention under the current global circumstances. It was the late 1993. The Treasury was holding auctions each week to sell bonds with different maturities: three-month bonds, six-month bonds, nine-month bonds and finally one-year bills. The public sector borrowing requirement was significantly high. Therefore, despite the annual inflation at 66 percent, the interest on borrowing in auctions fluctuated around 80-90 percent. [More]
    Unemployment, budget and the crisis at the doorstep
    Fatih Özatay, PhD 21 July 2011
    We can back the measures against heating up by raising taxes on certain consumption goods. Findings concerning the financial crisis in many countries suggest that the unemployment rate, which moves up along with crises, fall back to the pre-crisis levels way later than the recovery of the gross domestic product (GDP). According to a famous study, if the banking crisis is accompanied with a monetary crisis, the GDP achieves the pre-crisis level in average in 3.8 years. On the other hand, unemployment rate ameliorates a year later. [More]
    Will external conditions cool down the economy?
    Fatih Özatay, PhD 19 July 2011
    Given Italy's condition, the challenges facing the European Union have grown. In such milieu, caution can be expected in both demand side and supply side. One way to understand whether the economy has heated up or not is to examine outcomes which might be associated with heating up, as I did last Saturday. Inflation and current account deficit are perfect indicators for such analysis. Particularly the headline inflation that ignores the price movements and current account deficit movements (that is, the current account deficit with constant energy prices) that are not associated with the heating up of the economy prove very useful in this analysis. This second indicator in particular is an important signal for the heating up of the economy. [More]
    Preventing evaporation: What to do?
    Fatih Özatay, PhD 16 July 2011
    I believe that to ease the heating up, the fiscal policy should be tightened. Let me begin with a thesis that I cannot understand. There are some who think that when you say the economy has heated up, you imply that the Central Bank (CBT) has to increase the interest rates. Is this the only conclusion to be drawn from the heating up argument? [More]
    Do you need to see evaporation to be convinced?
    Fatih Özatay, PhD 14 July 2011
    In the last two quarters, and in the last quarter in particular, private consumption expenditures stand clearly above the trend line. Topics are coming over me. Of course I cannot complain. Who would like to beat their brain to decide what to write in these summer days? But I was actually willing to continue from where I stopped on Tuesday. In fact, I promised to do so. However, I am sorry to say that cannot keep that promise. [More]
    What should monetary policy debates focus on?
    Fatih Özatay, PhD 12 July 2011
    The new monetary policy implemented by the CBT can hardly be successful without the support of the BRSA. Can an independent authority (The Central Bank of Turkey - CBT) take a decision that will not give results unless supported by another independent authority (The Banking Regulation and Supervision Agency - BRSA) and expect the latter to act in compliance? In that case, who will ensure the coordination?  Even if the coordination is established, how will it be made binding? Can the authority which the mentioned institutions are independent from (The Treasury-The Minister of Finance) secure that compliance is binding? If it can, does independence not vanish? The ongoing debates about the new policies of the CBT do not focus on these questions. However these are of critical importance since [More]
    What will the Central Bank do from now on?
    Fatih Özatay, PhD 07 July 2011
    The Central Bank's actions should no longer be thought of in the usual inflation targeting framework. Since mid-2008, early 2009, the previously observed inertia in headline inflation has somewhat been broken. Also, yearly headline inflation, measured according to the core inflation index which has been increasing since October 2010, has been following a downward trend since 2004. [More]
    Inflation developments
    Fatih Özatay, PhD 05 July 2011
    I deeply doubt the extent to which core inflation indicates the core inflation. A month ago, the consumer price increase was announced to be -1.43. This way, inflation, which had been at 7.2 percent in May, went down to 6.2 percent in June. That is the lowest inflation rate in June since 2003. In the period between 2006-2010 inflation rates in June averaged -0.14 percent. The same value for 2007-2010 was -0.26 percent. [More]
    How to make them curious? How to make them study?
    Fatih Özatay, PhD 02 July 2011
    To benefit from the current education system, one needs to make the students want to work. We cannot get results as long as this is not done. I have been writing a lot on academic life recently. Today I look at it from a different perspective: I am concerned primarily with the student. [More]
    Zero real interest rate
    Fatih Özatay, PhD 30 June 2011
    What if the ratio of bank deposits to national income remained at the 1980s values? Let be rewind the story first: in 1970-79 period, the ratio of total deposits at banks to national income was in average 14.5 percent. The ratio increased to 18.7 percent in 1980-89 period and to 23.2 percent in 1990-99 period. The ratios for 2007 and 2009 were 43.3 percent and 55.8 percent, respectively. [More]