What is going on with agricultural employment?
Fatih Özatay, PhD
21 October 2010
Do you employ more workers as the crop per hectare increases? Figures net of seasonal effects imply that unemployment rate stood at 11.7% in July. It is seen that the rate has stuck at this level over the last three months. The lowest level of unemployment rate before the crisis was achieved in April 2008 with 10.0. Then the rate tended to rise steeply reaching 14.8 percent in April 2009. In short, though the rate recently showed a significant downwards trend, it is still 1.7 points above the pre-crisis level and it has not shown any movement for the last couple of years.
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Is the 2003-2010 period different than the previous five decades?
Fatih Özatay, PhD
18 October 2010
Average growth rate in 2003-1010 period is the same with that in the previous 42 years Let us assume that Turkey will achieve an average 6.5 percent growth this year. In that case, average growth rate over the five decades between 1960 and 2010 would be 4.4 percent. If we start the interval at 1950, average growth rate increases to 4.5 percent. This is not bad when considered alone. However, this average growth rate was insufficient to close the income gap between Turkey and the developed countries. For instance level of per capita income in comparison with the USA is the almost same with that in 1969. In terms of closing the income gap between Turkey and developed countries the attained 4.5 percent growth rate proves weak. Of course we can always say "Why care the others; we should be fo
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It is easy to support the status quo; it is radicalism that necessitates talent
Fatih Özatay, PhD
17 October 2010
We can live the moment and be happy. But take a look at the previous five decades, do we see a pleasant picture? In the first day of the 'Media's Radical Revolution' the question below appears in one's mind: If Turkey was to translate the attempt in the media into the economy, what was the step to take? But before that we had better pose this question: Does Turkey actually need an economic revolution?
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Possibility of pursuing a new election economy
Fatih Özatay, PhD
14 October 2010
Developed countries introduced almost 'crazy' measures against the global crisis. They created liquidity abundance and kept interest rates at quite low levels. As a result of this 'emerging market economies' across developing countries started to witness substantial short term fund inflows.
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Measures to prevent temporary FX inflows
Fatih Özatay, PhD
11 October 2010
The excess liquidity and low interest rates in developing countries is a source of trouble for developing countries including Turkey. And it appears that we will discuss more often the trouble developed countries brought on us. This phenomenon gives way to a rise in short term fund inflows to developing countries.
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Mind the difference between temporary-permanent FX inflows
Fatih Özatay, PhD
10 October 2010
In developed countries interest rates vary at quite low levels. Table 1 shows the returns on two-year treasury bills in selected developed countries, Turkey and Brazil. As seen, the difference is quite large. Interest on ten-year bills of developed countries stand at 2.3-2.9% interval while that in Japan stands at 0.9%.
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Consumer price inflation and headline inflation: why in the sulks?
Fatih Özatay, PhD
07 October 2010
Until some time ago, the day when the inflation figures were announced had a special importance for me. I waited the announcement with excitement and tried to evaluate the figures. I believe this was a 'occupational deformation' resulting from my duty at the Central Bank in the period of intense inflation after the 2001 crisis.
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The rabbit Central Bank pulled out of the hat
Fatih Özatay, PhD
04 October 2010
Yesterday I tried to explain the decision of the Central Bank of the Republic of Turkey (CBRT) on a new FX purchasing system. Now it is time to talk on what this decision implies for the exchange rate. To begin with, I have to underline that the new system allows surprise interventions in the FX market, if desired.
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A slight divergence from pure floating exchange rate regime
Fatih Özatay, PhD
03 October 2010
On Friday the Central Bank announced an important decision on FX purchase tenders. In the former system, daily purchase limit was US$80 million. The announcement said: "In case of strong capital inflows, the Central Bank can raise the quantity in regular FX purchase tenders in order to accelerate FX purchases." And continued: "...when such a decision is made, the extra quantity to be purchased within the following week will be announced on the first workday of the relevant week."
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There is nothing much that the Central Bank can do
Fatih Özatay, PhD
30 September 2010
Capital movements are free in many countries for long. Substantial FX trade is carried out every day. Purchase and sale of different currencies depends on the expected return on the financial assets denominated in the relevant currencies, which are planned to be held.
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