As bells of trouble ring
Fatih Özatay, PhD
03 June 2010
Signals for trouble are gaining ground. In this milieu it will be useful for us to learn lessons from the last two crises. Unfortunately if troubles gain more prevalence the lessons do not imply favorable outcomes for Turkey's economy. The lesson we should learn is hidden in the answer to this question: During the global crisis we performed worse in terms of production level and employment compared to the 2001 crisis though the economic conditions were more favorable before the former than the latter. Why?
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Initial conditions are quite different
Fatih Özatay, PhD
31 May 2010
Yesterday at this column the results of the comparisons for the two crises I have made until today were summarized. The comparisons focused on what happened during and after the each crisis. Today I would like to take a look at the initial conditions that prevailed before the two crises. It appears that I can make the final evaluation after a few more commentaries. For analyzing the initial conditions, I will take a look at the year 2000 for 2001 crisis and the year 2007 for the global crisis. I will also address the years 2001 and 2008 in order not to constrain the analysis with one year.
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What does leftist Lula do in Tehran?
Güven Sak, PhD
29 May 2010
It is obvious what rightist Erdoğan does in Tehran, is not it? Turkey is a non-permanent member of United Nations Security Council. The country is also a member of NATO. On top of it, Turkey is a neighbor of Iran. Under these circumstances, what else Mr. Erdoğan do but visit Tehran? You can question what leftist Lula does in Tehran; however the presence of Mr. Tayyip Erdoğan there must not be questioned. Let us see why. Please keep reading if you like to hear what happened in Tehran from me.
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10 Percent: Easy come, easy go
Fatih Özatay, PhD
27 May 2010
At the beginning of the week the press featured a statement by Honorable Prime Minister. The statement said that unemployment rate which stood at 14.5 percent in January and 14.4 percent in February might decrease to 10 percent in summer. Is this possible?
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Are you ready for a new period of exhaustion?
Güven Sak, PhD
25 May 2010
What the Greek crisis has to make us understand is this: the Greek issue got out of control because Angela Merkel, the Chancellor of Germany, did not act fast enough because of the elections in North Ren-the state of Westphalia. Since the politics has made the behaviors of electors in a state of Germany its main priority, financial markets all around the globe have started to fluctuate. An incident that could have been overcome with a low budget and limited inside regional borders, spread to the whole continent just because political remarks delayed the interventions and thus, the precautions that should have been taken could not have been. Are you aware of the lesson that should be learned from this? From this point on, politics is going to be considered of primary importance for economic
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We are finally back on the real agenda
Fatih Özatay, PhD
24 May 2010
The high level of unemployment in Turkey was one of the main issues Kemal Kılıçdaroğlu, Chairman of the Republican People's Party (CHP), highlighted in the historic Congress. This problem should in fact be at the top of the country's agenda. It appears that from now on it will become one of the key issues of debate on the political agenda, as well as it has to be.
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Will the credit expansion continue?
Fatih Özatay, PhD
23 May 2010
I have previously shared my growth estimates for 2010. If the assumptions in my basis scenario hold, growth rate in 2010 was expected to be between 3.8 percent and 4.9 percent. The indicators announced in the last couple of years stated that growth rate can even go above the upper limit of this interval: data reveal real credit expansion, exports tend increasing and the confidence in the economy has been recovering substantially.
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Did you use to like your school apron?
Güven Sak, PhD
22 May 2010
Honestly, I do not have any memories related to my elementary school apron-good or bad. Do you? 'We used to wear it to school', that's all I remember. I do not recall ever mumbling about having to wear it everyday. You can even say it was good, really. What you would wear was definite every single morning. I think that I do the exact same thing nowadays. Always the same blazer jacket, the same kind of shirts and pants. Same brand shoes, too. It is truly comfortable. It seems to me this is a habit we have grown accustomed to from the early days of elementary school. Those were my feelings the other day while I was reading the article, 'Ministry of Education would allow informal clothing in schools'. Then I wondered, 'I never had a problem wearing it, but was this school apron habit, unique
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Only an equation?
Fatih Özatay, PhD
20 May 2010
I believe that the recent developments in the European Union should have thought us that fiscal rule is not only an equation. In the Eurozone member states cannot exceed a certain threshold of public debt and budget deficit in proportion to their GDP. However the mentioned thresholds have already been exceeded and the only cause of this is not the global crisis for some countries. As in the case of the Greece example, the threshold had been exceeded even before the global crisis. What is more, this was enabled by manipulating budget figures.
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When will Greece form a debt swap?
Güven Sak, PhD
20 May 2010
Didn't we already know that the public finance was problematic in Greece? We did. But why is it that this piece of information didn't create a chaos until just now? Why did it take us until now to realize the spectre of public debt that has been haunting Europe? Are you aware, that there is actually no increase in the risks? It is just that tolerance to risk is decreasing. Sensitivity of balance sheets against risk all of a sudden increases. But how does this happen? Why do the risks that everyone was perfectly okay with carrying yesterday, become so unbearable, today? Unless this question is answered in a fulfilling manner, I think it is somewhat hard to discuss that the Greek crisis will not be able to be solved without a debt swap like the Brady Plan. Let's first have a look at the ques
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