Period of critical figures
Fatih Özatay, PhD
15 October 2009
There is a lot to deal with; for instance I would like to touch upon how inflation targeting regimes might change from now on. I have things to say in particular on the possible response of monetary policy to rapid credit expansion, as the IMF has opened to discussion in its last report. The Central Bank of Republic of Turkey has an important experience from 2004. The 'foreign fund growth' problem must also be discussed. Conditions in the aftermaths of the global crisis is different than 2001. So in this milieu I would like to turn back to discuss why the confidence in the economy cannot be improved solely by fiscal discipline. But I also have to finish what I started. In my two previous articles I examined the latest developments in industrial production, domestic credit supply and export
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Credit market risks
Fatih Özatay, PhD
12 October 2009
Today let us deal with the credit market and discuss whether or not a risk is growing for the near future. Credit channel was one that the effects of the crisis were transmitted. Both the evaporation of international liquidity facilities and the ongoing ambiguity made banks unwilling to extend credits. As well considering that domestic demand comes to a halt in such climate, we should also take into account that willingness to receive credits also decreases.
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Developments in production and exports
Fatih Özatay, PhD
11 October 2009
We have talked about 'developed countries and others', or 'different economy policies against the crisis', and now it are time to talk about Turkey. Today, I would like to assess the latest developments. First, I will say a few words about the industrial production index announced this week.
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Timid reaction of 'us': Why?
Fatih Özatay, PhD
08 October 2009
I will continue with the 'Us and them' series. Main subject of the series was the difference between country groups in terms of the policies they implemented to tackle economic contraction and rising unemployment. Two main phenomena attracted attention in this context. First, there were fundamental differences between the countries, which are not developed and which were affected by the crisis the most, in terms of their responses to the crisis. Second, such difference could also be observed between the responses of developed countries and other countries. However, fiscal indicators were not in favor of developed countries in G-20.
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Us and them
Fatih Özatay, PhD
05 October 2009
For a while, I have being touching upon the policies different country groups implement to tackle economic contraction and rising unemployment. Two main phenomena attracted attention in this context. First, there were fundamental differences between the countries, which are not developed and which were affected by the crisis the most, in terms of their responses to the crisis. Second, such difference could also be observed between the responses of developed countries and other countries. Today I want to discuss the possible reasons for this difference.
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‘Countries like us’ could have never done this
Fatih Özatay, PhD
04 October 2009
The first measure to tackle economic contraction and rising unemployment in the short term is definitely the policies to stimulate domestic demand. On the other hand, in the famous Asian and Russian crises emerged in the second half of 1990s as well as in the following crisis in Turkey, countries where the crises emerged or spread to implemented a remedy in the opposite direction: they tightened monetary and fiscal policies.
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What the problem will be in the future for those who remain passive
Fatih Özatay, PhD
01 October 2009
If you surf on the Internet and look what did countries considered as emerging economies do during the crisis you get depressed. The question "Why did we remain so passive in responding the crisis?" comes to your mind.
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Success of the program and external conditions
Fatih Özatay, PhD
28 September 2009
Third section of the Medium Term is titled 'macroeconomic policies and objectives. Second paragraph of this section makes the following short evaluation regarding the world economy: "The recovery of our country from the influence of the global crisis is closely related with the improvements in the world economy. Targets in the program are determined by taking also forecasts about foreign economic conjuncture. Recent estimations of international institutions suggest that throughout the world the recovery will start from the beginning of the last quarter of 2009 and in 2010 a positive growth will be realized even at a low level...
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Conditions for the success of the program and the IMF
Fatih Özatay, PhD
27 September 2009
I already started to discuss the success conditions of the Medium Term Program announced in mid-September. The points I touched upon on my last commentary were: promised levels of monetary and fiscal policy variables over the 2010-2012 period must be 'attainable'. Second, there must be a correlation between these variables and variables that concern everyone such as growth and unemployment so that the 'attainability' serves a purpose. It appears that there is no problem considering these two conditions.
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Conditions for the success of the program
Fatih Özatay, PhD
24 September 2009
Growth forecasts of the Medium Term Program (MTP) for the 2010-2012 period is as follows: 2010: 3.5 percent, 2011: 4 percent, 2012: 5 percent. If these forecasts are realized, growth rate will be below the potential growth in the first two years of the program and that will approach the potential in the last year of the program.
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