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    Brain drain after the highway passing through METU
    Fatih Özatay, PhD 24 October 2013
    Turkey needs bright people who will conduct seminal research, come up with innovations and hence pave the way for new businesses. Can Turkey reverse the brain drain? Hardly. Can it lower unemployment rate to 7 percent permanently? Not, it cannot. 8 percent? Still difficult. So, what does the highway passing through the Middle East Technical University (METU) campus have to do with brain drain or unemployment rate? Let me tell you. [More]
    The significance of being insignificant
    Fatih Özatay, PhD 22 October 2013
    The recent market relief is because the FED is not expected to change its monetary policy at least up until December. The Central Bank Monetary Policy Committee (CB-MPC) will convene on Wednesday and the Federal Reserve (FED) on 29-30 October. Just a month ago, Turkey was waiting with excitement for their decisions and the tone in their statements. There is no such interest today, however. Is it because of the long vacation Turkey took last week? Not really. [More]
    A joint Nobel Prize for opposing views
    Fatih Özatay, PhD 19 October 2013
    Fama did not renew his subscription to the Economist because they made a large coverage on financial market bubbles after the global crisis. The Nobel Prize 2013 in Economic Sciences was awarded jointly to E. Fama, L. Hansen and R. Shiller for their contributions to our understanding of asset price movements: Hansen for developing a statistical method, and Fama and Shiller for their theoretical findings. I referred to their views in a series from January 2010 on the global crisis. The interesting part of the story is that point of views of Fama and Shiller were almost contradictory. [More]
    The sense of hollowness must be overcome
    Fatih Özatay, PhD 17 October 2013
    There is an acute need to redesign the MTP texts from scratch. They do not duly reflect the bundle of research and studies carried out by the Ministry of Development. Some years ago cigarette packages used to bear some clause like “smoking harms your health as per this article of that year’s execution plan.”  If felt like the execution plan deemed smoking harmful whereas actually it was not. Indeed, execution plans in a way invited such inference. [More]
    Latest projections
    Fatih Özatay, PhD 10 October 2013
    The Medium Term Program estimates lower GDP growth for 2013 and 2014 compared to the previous program. After a series of “emotional” commentaries, today I will go back to figures. I am afraid some of my readers find such pieces “dry.” But someone has to assess these developments as they turn out to affect lives of us all. I promise I will keep numbers at minimum. [More]
    Please just tell us what to remember and what to forget
    Fatih Özatay, PhD 08 October 2013
    Why are we supposed to remember the total GDP loss during the 1994 and 2001 crises but ignore that the loss was higher in the 2009 crisis? When I was in secondary boarding school I used to get beaten up several times by some study-hour instructors and the deputy principle, especially in the first year. Sometimes it was because of a glass broken while we were playing ball, or because I could not have had a haircut for my late aunt who used to keep guard of my pocket money was not at home. Or there were times when I was slapped by my study-hour instructors for secretly reading the novels our Turkish teachers recommended us to under my desk. They would say that I will not grow into an important person as I read novels instead of studying my textbooks. [More]
    A series of oddities (2)
    Fatih Özatay, PhD 05 October 2013
    The average of officially declared inflation targets since 2006 averaged 5.3 percent while actual inflation over the same period had an average of 8.3 percent. I have new items to add to the list of oddities in Turkey. Inflation gets the first place today. The average of officially declared inflation targets since 2006 averaged 5.3 percent while actual inflation over the same period had an average of 8.3 percent. This is not because inflation rates were initially too high, pushing up the average despite the downwards trend achieved later on. Rather, inflation rates have been floating up and down around the average since 2006. For instance, the average between January 2012 and September 2013 was 8.3 percent! This could be acceptable. [More]
    I don’t have the answer
    Fatih Özatay, PhD 03 October 2013
    Fighting against informality should be the first step of the reforms aimed to increase Turkey’s sustainable growth rate. We always hear and voice assertive statements such as “productivity level should be improved” “inflation should be reduced”, “sustainable growth rate should be increased” or “high-technology exports should grow.” Sure all of these and similar remarks are unquestionable facts, but it is nothing but hollow to come up with these unless you answer the question how. [More]
    Why do you hate us Aesop!
    Fatih Özatay, PhD 01 October 2013
    Nowadays the main cause of the tension originating from the US is in the second category, that is, the risk that things might jump the track. For your sanity, it is useful not to always see the glass half empty. Of course it is impossible not to feel sorry for the high unemployment rates in Spain and Greece, people losing their jobs or young men and women with university degrees but without a job. But we also need to admit that the European crisis also has fun sides. Or at least we have to say “it used to have” since we have not heard much of Europe lately. [More]
    Condoning the rentier lobby and raising the nonexistent one instead
    Fatih Özatay, PhD 28 September 2013
    The systematic encouragement of profit-seeking and the absence of any taxes on land profits reinforce the possible risk of lowered potential growth rate for Turkey Land profit is easy to earn everywhere around Turkey. This is why industrialists shut down their production facilities and switch to the construction sector, not to mention allocating funds for research and development. The other day the mayor of an important city was painting in glowing colors a project on the construction of a controversial highway, arguing how it would increase the value of the land at the district the highway will pass through. [More]