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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. [More]
    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... [More]
    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. [More]
    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. [More]
    Brazil’s credit rating increased; Turkey’s outlook turned to positive
    Güven Sak, PhD 24 September 2009
    Ramadan holiday must not make us ignore recent positive developments. It seems that things are beginning to get back on tract in the world; does not it? First of all, Medium Term Program (MTP) was announced. Keen efforts of Ali Babacan, State Minister for Economy, have delivered the initial results; denial period in public finance ended. Denial period also seemed to have ended with Pre-accession Economic Program (PEP), but in the same period detailed changes were introduced in both the government and bureaucracy and economy became to be of secondary importance. With the MTP, however, the denial-oriented approach to fiscal condition was replaced with acceptance and thus the disaster in public finance became visible to all of us. In fact, it is a good thing that the fiscal outlook put forth [More]
    MTP and independence of the Central Bank
    Fatih Özatay, PhD 21 September 2009
    Among the most important elements of the Economic Recovery Program launched in Turkey in the aftermaths of the 2001 crisis was the granting of independence to the Central Bank. Independence does not mean central banks' taking actions without anyone else's approval. The practice in many countries as well as in Turkey is as follows: [More]
    Large difference between industrial growth figures
    Fatih Özatay, PhD 20 September 2009
    Recently, economy media lays particular emphasis on one point: There is a significant difference between the national income growth figures for the second quarter announced last week and the industrial production index (growth) announced earlier. They say that such a difference did not exist in the past. So, let us compare the growth rate of the industrial sector as a sub-item of GDP with the growth rate derived from industrial production index. First of all, it is necessary to remind you of what happened in the last quarter. As GDP data suggests, industrial sector growth was minus 8.7 percent in the second quarter. But industrial production index for the same period is minus 15.4 percent signifying a considerable difference. [More]
    Do you follow the discussions in the US?
    Güven Sak, PhD 19 September 2009
    Nowadays United States of America (USA) does not discuss the 2008 crisis much. Three out of four headlines in the web site of White House ( is not related with the 2008 crisis. Three-fourths of the headlines and the agenda of the USA are occupied by the health insurance reform draft of President Obama. The discussion is not carried out on rambling grounds as in Turkey. There exists a quite tangible health insurance reform draft. Those who like it and those who oppose it discuss the draft. What the reform means is put forth openly and clearly. Nobody throws his voice as people in Turkey does considering the "democratic opening" issue.  One immediately gets what the other says because they do not decide the issue and play with his own rules. This discussion is important. I [More]
    Medium term program has three vulnerable points
    Fatih Özatay, PhD 17 September 2009
    Yesterday Deputy Prime Minister Ali Babacan announced the medium term program for 2010-2012 period with a press meeting. Moreover, revised estimates for 2009 were also announced. Let me first put this: Macroeconomic targets and estimates seems to be achieved under two conditions: if a new global shock is not encountered and if we can fulfill the measures and reforms listed. [More]
    It is OK for them, but what about our government?
    Güven Sak, PhD 17 September 2009
    Medium Term Fiscal Program (MTFP) began to be shaped. Now we at least know that there exists a text on which an agreement is reached "within the government" in general terms. This is a positive development. Now we will wait to see what the general statements mean and whether or not these will be put into practice problem-free. Of course in the meanwhile we can start evaluating the existing parts of the document. Today, let us continue thinking on the fiscal discipline and fiscal rule concepts. In this context, it might be easier to evaluate the figures announced. [More]