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    Possible theoretical developments
    Fatih Özatay, PhD 30 August 2009
    In the upcoming period, feverish endeavor is ahead economists. In particular in macroeconomics, new models are possible to be developed. In some macroeconomic models, financial sector does not take place even as a detail. Considering what the earthquake in financial sector put world through, this approach must lose ground. [More]
    Crises and insolvent banks
    Fatih Özatay, PhD 27 August 2009
    There are numerous rumors about when exactly the global crisis emerged. There are people that assume it as the end of 2006 as well as August 2007, as FED Chairman Bernanke argued in the speech he delivered six days ago. However, there is a consensus that the crisis peaked in September 2007. Let us recall what has happened: [More]
    Production loss
    Fatih Özatay, PhD 24 August 2009
    I also mentioned recently; in abnormal periods, it is not enough to evaluate the changes in production in comparison solely with the same period the year before. In addition to this, it is necessary to consider the loss of production over the period where production peeked and bottomed. This way, the loss incurred by the crisis becomes more apparent. [More]
    Again on tax cuts
    Fatih Özatay, PhD 23 August 2009
    Here comes another commentary on the developments in automotive sector as it became a tradition following the special consumption tax (SCT) cut decision introduced in March for some sectors. I have been writing on this topic every month mainly because: budget resources did not allow us to do much against the employment and production reducing impacts of the global crisis. However, it was obvious that there was also a need for domestic demand boosting policies. In that case, the reasonable option was to direct limited budget sources to areas that can boost production to the highest level possible. [More]
    Problem in the quality of education
    Fatih Özatay, PhD 17 August 2009
      Economic theory says that enhancing the skills and knowledge of people to a higher level is the most important factor that will improve the level of per capita income and economic growth. Of course this cannot be accomplished overnight. Long term is in question. Let us leave aside the foundation universities that do not rank at top in quality listing and take a look at those at top. You possibly read about this issue on the education pages of daily papers. Let us take the minimum score that will enable admission with scholarship to any department in any of the top ranking foundation universities and the minimum score for admission without scholarship. You will see that there is a huge difference. There might be a couple of departments for which this does not apply, but is widely valid. T [More]
    False interpretation
    Fatih Özatay, PhD 16 August 2009
    Probably the depth and duration of the latest crisis have depressed us so much that we have gone back by at least 15 years in the interpretation of simple production increases. We started to talk about the rise in industrial production in comparison to the month before to show that production has been increasing. For instance, it is announced that in July industrial production increased by 7.3 percent. This does not have any meaning at all. In fact, when compared to the year before, production in July was 9.7 percent lower. [More]
    Rate of contraction decreased
    Fatih Özatay, PhD 13 August 2009
    In June fall in industrial production has lost pace and realized at 9.7 percent making us happy. Industrial production has been falling since 2008 August; of course compared to the same period in the previous year. [More]
    Being not ready for rainy days
    Fatih Özatay, PhD 12 August 2009
    September 12 coup led to a severe destruction in universities. Among the most destructed was Ankara University Faculty of Political Sciences (Mulkiye). Yilmaz Akyuz, a professor in Mulkiye back then unfortunately found himself out of the university in his most productive age like numerous other professors. Maybe, this was good for him, because he went to Geneva as chief economist of UNCTAD. However, Turkey lost one of the most important macroeconomist - in my consideration the most important. [More]
    Is the fall in interest rates a good sign?
    Fatih Özatay, PhD 09 August 2009
    In my last article, I argued that the reason behind appreciation trend of Turkish lira or the downward trend in interest rates is the absence of a solid economic policy framework. I said this was an outcome of the economic contraction and the rising unemployment mainly, and of the recently rising global risk appetite to a certain extent. [More]
    Drops in interest and exchange rates: What do they indicate?
    Fatih Özatay, PhD 06 August 2009
    We also saw this after the 2001 crisis. Exchange rate that started to rise continuously after the crisis began to fall down with the last months of the year. With the termination of the political ambiguity of the second half of 2000 and the Iraqi war in the early 2003; the decrease in exchange rate become evident and substantial number of people and particularly exporters started to complain about the appreciation of Turkish lira. [More]