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    What an incentive
    Fatih Özatay, PhD 14 May 2011
    You have to do all it takes to change the status quo. Evidently, this cannot be done by employing disincentive mechanisms. There is a close relationship between individuals' behaviors and the way they are incentivized. This is such an important relationship in economic theory. On the other hand, it is clear that the word "incentive" (stands for 'özendirmek' in Turkish) does not always have a positive meaning; for instance, one bad friend can encourage his fellow to start smoking. This is the case also with the economics. [More]
    Opinion follow-up: Do the credit expansion slow down? (2)
    Fatih Özatay, PhD 12 May 2011
    Banks do not slow down borrowing from the CBT to compensate the fall in the amount of deposits for credits. In the first commentary of the "opinion follow-up" series written one and a half week ago, I said that I will continue with a similar topic. The main question I asked in my commentaries on the decisions of the Central Bank of Turkey (CBT) was the following: to what extent a central bank applying inflation targeting regime can slow down the credit expansion given that the liabilities of the banks are mainly short term? [More]
    Rapid credit expansion with the eyes of others
    Fatih Özatay, PhD 10 May 2011
    It is needed to tighten the fiscal policy for the potential rainy days and finally not to categorically reject short term capital controls. We had better examine the rapid credit expansion issue with the eyes of others. With "others", I will refer to the IMF and address the "World Economic Outlook" report published in April 2011. [More]
    Objecting to the categorical objection
    Fatih Özatay, PhD 05 May 2011
    Measures aimed at reducing short term capital inflows must not be categorically objected. The negative impact of the global crisis on our national income was eliminated as of the third quarter of 2010. On the other hand, the impact on the export performance and unemployment prevails. We are talking about a crisis the effects of which became visible as of the end of 2008. In other words, although two and a half years passed since the eruption of the crisis, the employment market could not recover and the demand for Turkey's exports did not achieve the pre-crisis levels. [More]
    Impact of the crisis still felt on exports
    Fatih Özatay, PhD 03 May 2011
    The level of exports in April 2011 corresponded to 92 percent of that in July 2008. Thus, the impacts of the crisis are still felt. Association of Turkish Exporters (TİM) has announced the export figures for April: exports had a record-high (for Aprils) volume at US$ 11.8 billion indicating a 25.5 percent year-on-year increase. This is pleasing. Today I want to take a closer look at the export performance; I will focus on the TURKSTAT data announcing figures with a one-month delay. [More]
    Opinion follow-up: Do the credit expansion slow down?
    Fatih Özatay, PhD 26 April 2011
    It appears that the new policy could not fulfill its objective, yet. However, we need to see up-to-date data. In the context of the new policy framework, the Central Bank of Turkey (CBT) last week has decided to increase the required reserve ratio for short term TL deposits. This is the sixth decision to this end since September 2010. The Bank aims to slow down the rise in the credit volume as it believes that this is needed to secure financial stability, one of the two major objectives of the bank. I have written many commentaries on this subject. The main question was this: to what extent a central bank applying inflation targeting regime can slow down the credit expansion given that the liabilities of the banks are mainly short term?  Liquidity problem [More]
    Index obsession-2
    Fatih Özatay, PhD 23 April 2011
    Having qualified academic publications is one of the prominent criteria used for measuring the performance of academics in some universities. Continued from last Saturday. First the summary of the previous week's commentary: Academic researchers submit their studies to academic journals to share their research. This is a thing explorative academics like to do. On the other hand, academics must have conducted qualified studies in order to be awarded the assistant professor, associate professor and professor titles. Moreover, having qualified academic publications is one of the prominent criteria used for measuring the performance of academics in some universities. [More]
    Is Mr. Başçı left with the “hot tray”?
    Fatih Özatay, PhD 21 April 2011
    Is it possible that Erdem Başçı did not participate in the design of the unorthodox monetary policy in effect? Let me begin with a phenomenon the readers of this column are familiar with: available studies suggest that the differences in institutional structure are quite important for understanding the income gap among countries. This can be read as follows for the case with Turkey: one of the major reasons why the welfare gap between developed countries and Turkey did not change considerably must be traced in the institutional structure. [More]
    2010 budget comparatively looser than the 2009 budget
    Fatih Özatay, PhD 19 April 2011
    If you are not happy with the high level of current account deficit in 2010 you should have tightened the budget. This is currently missing. Last Thursday I stated that Turkey preferred to carry out a loose fiscal policy in 2010 despite the general opinion. Today I want to prove this argument based on statistical figures. [More]
    Index obsession-1
    Fatih Özatay, PhD 16 April 2011
    The study is recognized to be qualified if it is published in a journal involved in a respected index. However, this recognition would not always be true. In his commentary on April 8th, Mr. Eyüp Can, Executive Director of Radikal newspaper, wrote that the problems about higher education in Turkey must be handled thoroughly. In this context he talked about some higher education "routines". One was "advancing in the "swimming against the tide" branch by making effort to increase the number of studies quoted in indices without paying attention to the value added created." [More]