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    Growth disrupts estimates
    Fatih Özatay, PhD 09 December 2010
    Data revealed that in October industrial production regained the pre-crisis level. This is the week of two important indicators: industrial production index for October was announced yesterday. And tomorrow we will learn about the GDP figures for the third quarter. [More]
    Why the inflation rate in the USA does not rise?
    Fatih Özatay, PhD 06 December 2010
    Monetary expansion does not happen via banknotes raining down on the streets. I have previously mentioned that during the global financial crisis Federal Reserves (FED) has injected substantial amounts of liquidity into the system first to put out the fire in the financial system and then to make the system able to extend credits again. I underlined that from July 2007 to December 2008 FED's balance sheet grew by 2.6 times. Size of FED's balance did not change yet. [More]
    Fight in words
    Fatih Özatay, PhD 05 December 2010
    Measures voiced in the debates on hot money flows should not be considered as unilateral. The news-story of two pages prepared by the Finance Service was titled 'Fight in Words against Hot Money!' Can you fight against such a phenomenon with words? It depends on the words, I believe. If you say something like 'hot money is harmful; we must all fight against it' or something, it will obviously not be much effective. However, if the words declare in advance some measures which will potentially be put in force in a month or even gives strong clues about the decisions without declaring it, it can give desired outcomes as early as today. [More]
    A page in history
    Fatih Özatay, PhD 02 December 2010
    It is stated that one of the major factors that triggered the crisis was high interest rates in Germany. We should not be surprised of the developments in the European Union anymore. Today's commentary is on a page in history. [More]
    Merkel and Sarkozy's actions
    Fatih Özatay, PhD 29 November 2010
    'Academic research reveals that market attacks take place also without a valid cause.' Recent developments in the EU brought forward the alleged meeting between Germany's and France's administrators. In May 2010, European Financial Stability Facility was established. Member states can benefit from the fund in the case that they are unable to borrow from the market sufficient amount of funds at a reasonable cost, provided that they agree to implement an economic program commonly decided by the IMF and the European Commission.  Total amount invested in this fund by member states is €440 billion. With the contribution of the IMF, the fund sums €750 billion. [More]
    What comes with FED goes with FED
    Fatih Özatay, PhD 28 November 2010
    'FED's balance sheet will not remain at this size. Neither will the interest rates.' One distinguishing feature of the year 2010 when Turkey is concerned is that foreign exchange (capital) inflows are mainly short-term. In the first nine months of the year the amount repaid by the corporate sector was US$5.5 billion higher than the amount of the long-term credit borrowed. This difference for the banking sector was US$0.4 billion. Foreign direct investments, frequently declared to be the most desired sort of capital inflows, dropped significantly to only US$4 billion. I would like to stress the 'only' part because this amount is significantly low compared to the 2006-2009 period. [More]
    An interesting comparison on taxes
    Fatih Özatay, PhD 25 November 2010
    Ireland's tax revenue is higher than Turkey's. Ireland has finally agreed to design and implement an economic package in cooperation with the IMF and the EU. The reason for Ireland' reluctance to sign this program was that such program would force it to raise tax rates. The country carried out a number of reforms in the context of the development attempt launched in mid 1980s part of which included tax reform. In Ireland corporate sector is obliged to pay 12.5 percent of its revenues in form of tax.  Low tax rates are not to blame [More]
    Other countries do not remain passive
    Fatih Özatay, PhD 22 November 2010
    While we were enjoying the holiday, South Korea introduced additional measures to discourage short term capital inflows. 'Not meeting' with Ireland today seems to be the best option. I had envisaged the risk of accusations of being the 'Ireland inside us' but I never foresaw that I would face resistance. It seems that friends preparing the column to press did not like my way of defending Ireland strongly. The title of the figure which is the cornerstone of my comments supporting Irish friends in their hard times, reading 'you are the sons of a nation which has accomplished a lot over the last twenty five years' somehow was printed as 'Comparison of per capita income in Spain and USA'. Err is humane; but I want to assure my Irish brothers that this time it was not my mistake. [More]
    Ireland’s independence
    Fatih Özatay, PhD 21 November 2010
    'Ireland's current state reminds me of what Turkey had gone through on the eve of the 2001 crisis.' We were in holiday whereas there they were worried about the future of Ireland. The crisis in Ireland continues with pace. Ireland has always been a country which was exemplified as a role model for successfully closing the welfare gap between developed countries and Irish economy. I am okay with being the 'Irish inside us'; despite all I will present the success of Ireland since mid 1980s with a figure. Is not this why good friends are here for? [More]
    Harder, the better
    Fatih Özatay, PhD 18 November 2010
    In this milieu where the wounds of the crisis are not yet completely relieved, countries taking series of boosting measures will come out ahead. It is clear that Turkey is not in the first league in terms of its economic prosperity level. Furthermore, the gap between countries in the first league and Turkey does not narrow down no matter what. On the bright side, the gap does not widen, either. There appears a strange form of stability when Turkey's economic status is concerned. [More]