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    Please do not read if you do not want to be upset
    Fatih Özatay, PhD 09 March 2009
    Now, it is time for the contraction figures for 2009. First, I would like to explain the method I followed. First, I formed a small and simple model that uses quarterly data for the 1998-2008 period. This simplicity enables disregarding all details and focusing solely on growth. [More]
    Economic contraction in 2009: too unpleasant to write about
    Fatih Özatay, PhD 08 March 2009
    On Monday, I said that the question 'how much will the economy contract in 2009?' must be answered by the help of a technical model. In fact, I have the initial results on my computer for a while. But, I did not want to announce them here as they are extremely unpleasant. Therefore, I wanted to make more trials and minimize the margin of error. Today, I will not give any figures but go on comparing the situation in 2009 with that in 2001. [More]
    How much will the economy contract in 2009? (2)
    Fatih Özatay, PhD 05 March 2009
    The title question can also be asked as "What will be the contraction in 2009 in comparison with 5.7 percent of contraction in 2001?" To give a satisfactory answer for this unpleasant question, I evaluated the export performance on Monday. Exports of Turkey fall down by gradually increasing rates since October. Pace of slowdown in January was around 25.7 percent. According to data provided by Assembly of Turkish Exporters, volume of exports fell down by 35 percent in February as compared to the same month last year.  On Monday, I stated that a 20 percent fall in 2009 exports as compared to 2008 would roughly result in a 3.5 point fall in growth rate. On the other hand, in 2001, Turkish exports did not fall down, but increased by 12.8 percent. [More]
    How much will Turkey’s economy contract in 2009 (1)?
    Fatih Özatay, PhD 02 March 2009
    What will be the rate of economic contraction for Turkey in 2009? This question can certainly be answered by naming any figure. However, then, it is necessary to answer why will the rate be exactly 'that' figure, not lower or higher. It is necessary to enumerate the rationale for the contraction prospects so that it can be discussed whether they are realistic or not. A way of answering this question is employing a technical model. The most basic model will include the sup components of the national income (such as consumption, investment, exports and imports). Then, a series of technical calculations will be made based on the determinants of the components and their impacts on the components. In the current environment, the candidates for major determinants of components like consumption, [More]
    Hand in hand against the crisis
    Fatih Özatay, PhD 01 March 2009
    The economic program that has to be designed to tackle the crisis must involve many measures. A part of the measures are related to credit guarantee system which is required to ensure the operation of both foreign exchange and TL credits, which are currently blocked. Since the end of October, I have written several columns on how the system can work. In addition, the think-tank I work at, TEPAV published several notes on this issue. I observe that, in the recent period, some columnists as well as prominent names of political parties, for instance such as CHP leader Deniz Baykal, are considering the system as an important solution advisories. And this makes me really happy as the ultimate aim of the recommendations involved in this column is initiating an important discussion on the recomme [More]
    A new recommendation to tackle the crisis (3)
    Fatih Özatay, PhD 26 February 2009
    I believe that the need for an integrated approach against the crisis is apparent. Despite this, however, the current administration has always done 'piecework' until now: That decision two months ago, this decision two months later... This does not have a confidence-building impact. What is more, since the decisions are not taken under the framework of an economic program by paying regard to consistency, the funds that might improve growth and employment when allocated for a different area are wasted in less-efficient areas. So to speak, arms are wasted for nothing. [More]
    A new recommendation to tackle the crisis (2)
    Fatih Özatay, PhD 23 February 2009
    In an environment where no one trusts another, credit channels are naturally obstructed. However, we have to make the credit channels work as soon as possible to slow down the economic contraction and ensure recovery. We need a mechanism that will decrease risk perception of banks (that will diminish the inconfidence in the corporate sector) so that the banks will not act reluctant in extending credits. A third party to intermediate between the bank and the company gives an opportunity to fulfill this aim. Guarantee system My suggestion as I frequently touched upon since October 20, 2008 had the potential to ensure the functioning of TL credit channel. The fund to be established by means of the resources to be allocated from the budget (up to 0.8 percent of the national income) would pr [More]
    A new recommendation to tackle the crisis
    Fatih Özatay, PhD 22 February 2009
    Both domestic and foreign credit channels came near to a halt. If the credit channels do not start working again, Turkish economy will contract significantly. I have discussed many times in this column what can be done to prevent this. The first recommendation was enabling the credit channel to function through the credit guarantee fund. [More]
    Does the bullet always draw?
    Fatih Özatay, PhD 19 February 2009
    Characters in Wild West comics are charmed. In general, the bullets draw their body. Bullets are newer pointed at mortal points, even in the bar battles where guns are fired from a very close distance. The right opposite can of course be seen, though rarely. For instance, Kit Carson, old friend of Tex Willer, who one of the rare Redskin-friendly Wild West characters, was shot from the right shoulder and laid up for a couple of days. Tex had to do the entire 'cleaning' job. I have read numerous issues of the comics, but all the bullets bore a hole in their hats and result in complaints like "Oh! This was my new hat".  Readers were complaining "This is too much to be real". Thank God, a good surprise was made for the readers and the bullet did not draw. [More]
    Fewer sins, more punishment
    Fatih Özatay, PhD 16 February 2009
    Yesterday, I started to give some indicators proving that the ones that committed fewer sins are more severely punished. There were two apparent examples for the punishment: First, countries like Turkey faced higher economic contraction as compared to the countries where the crisis was originated or spread from. Second, gradually tightening global capital was escaping from countries like Turkey towards the latter (flight towards quality). [More]