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    Why did they just leave those giant cities?
    Güven Sak, PhD 07 November 2009
    In a recent issue, Radikal daily published a news story titled: "It was a civilization as developed as Ancient Egypt; they disappeared 3600 year ago". The story told the destiny of the Caral-Supe, central of the earliest civilization of South America. Caral-Supe existed 5000 years ago; at the same age with the Ancient Egypt. In this respect, can it be considered as the first shrinking city of the world, just as Detroit in USA has shrank by half since 1950? Have you ever thought about this? Why did they just leave those giant cities? I believe the issue is closely related with climate change. Today, let us observe the fate of Teotihuacan city and then conclude with climate change and environment. [More]
    We should not curse inflation targeting regime
    Fatih Özatay, PhD 05 November 2009
    On Tuesday October inflation rate was announced; we learn that the pace of increase in consumer prices is 5 percent. I have not been talking about inflation for a while. Of course the main reason is the serious damage caused in Turkey's economy by the global crisis. It was more interesting to seek a solution for the question what can be done to tackle the rise in unemployment and economic contraction. [More]
    Who would like a new Demirbank incident?
    Güven Sak, PhD 05 November 2009
    I believe that no one would like a new Demirbank incident nowadays. Would you? No, none of you would. The question in the title is exactly what the recent "What shall we do with the government debt securities (GDSs) in Central Bank's (CBRT) balance sheet?" discussion wants to make us ask. The point "Treasury-friendly central bank" policy will drive us to will be a new Demirbank incident. It is also the Demirbank incident what resulted in the explosion of banks' balance sheets in 2001. This path will end in no good. Let us see what the issue is. [More]
    How did the US economy grow? What did Turkey miss?
    Güven Sak, PhD 03 November 2009
    American economy grew by 3.5 percent in the third quarter of 2009. Thus the free fall of the economy came to an end, period of recovery begin. So, are we done now? No, we are not. With the end of the free fall in the US economy, does the period we look forward to, where Turkey will grow at the highest level, begin? Of course it did not. We are at the beginning of a period where apples must be separated from oranges. First, let us calculate what we missed. If you wonder what Turkey missed in policy inertia, please go on reading. [More]
    100 flowers 100 theories
    Fatih Özatay, PhD 02 November 2009
    It is apparent that the economics is going through tough days. The problem is not only that there were few economists that foreseen the global crisis. Of course this alone is quite important. After all, we are talking about a discipline that falls short in estimating the future. But there are also other problems. [More]
    When will the early elections be held?
    Fatih Özatay, PhD 01 November 2009
    News that early elections can be called started to come to the forefront. What can be the date of early elections? Of course this question has various dimensions, but I will only address the economic dimension. But it is hard to answer. [More]
    Environment is now the core: Why did Apple abandon US Chamber of Commerce?
    Güven Sak, PhD 31 October 2009
    Environmental movements were at the edge of the system until today. They were opponents. But it appears that they will from now on be at the very core of the system. 21st century capitalism will be determined by the decades of opposition by environmental movements. While we all are thinking how the end of the economic crisis will be, capitalism seems in a rush to turn green. See that soon the darkest conservatives will become environmentalists. Environment is now becoming the core. What made me think that? Haven't you heard? Apple Company left US Chamber of Commerce on grounds that the Chamber does not take progressive and constructive attitude towards climate change regulations. Capitalism is becoming green. Let us see what is going on. [More]
    That fund problem
    Fatih Özatay, PhD 29 October 2009
    You have read several times at this column that Turkey's response to the crisis is 'too late, insufficient and partially at the wrong direction'. I tried to touch upon the possible reasons for this phenomenon. Today, I would like to elaborate on one of them. You aim to implement a fiscal policy to stimulate domestic demand. Of course there are several ways to do this. But those first coming to mind are: increasing unemployment benefits, distributing additional bonuses to the retired, launching trainings to improve the skills of labor force, accelerating infrastructure investments and or cutting down taxes... Of course it is easy to list the measure; the hardest part is to create budget means necessary to realize those. In the end, budget deficit increases as you implement one or more of th [More]
    Venezuelan Central Bank will purchase GDS; what about the CBRT?
    Güven Sak, PhD 29 October 2009
    Venezuelan National Assembly amended the Central Bank of Venezuela (BCV) Law this week. According to this, BCV can now purchase government debt securities (GDSs). News agencies announced this with "end of Central Bank independence in Venezuela" spots. They said, in Hugo Chavez's country, what is abnormal must be regarded as normal. Reading about this, the statement by CBRY Governor Durmuş Yılmaz as "We will create a GDS portfolio" came to my mind. CBRT would as well purchase GDSs just as Chavez asked from BCV. But what would be the result? [More]
    Important problem of central banks
    Fatih Özatay, PhD 26 October 2009
    For a while, I have been touching upon an issue that is big of a problem for the implementation of monetary policy. The fundamental question was: Should monetary policy be used to prevent the asset price bubbles that played a major role in the emergence of the crisis? The commentary on this issue was published on last Thursday. At the end of that commentary I asked questions one after another: So, what can central banks do in the event of a credit expansion? A problem arises just at the beginning: At what pace credit expansion is rapid? What if a credit expansion we consider rapid in fact does pose any risk for the financial system? Assume that you overcome this challenge and decided that the things are not on track in the credit market? Then what would you do? [More]