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    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]
    Single digit GDS interest rate is not a good sign
    Güven Sak, PhD 06 August 2009
    Write down the fourth of August. On the fourth of August, indicative GDS (government debt securities) was traded at 9.92 in secondary market. GDS interest rate fell to a single digit level. A development that would be a good sign under normal conditions is not so now. Under the current conditions, single digit GDS interest is an indicator that the economy is in depression. What the single-digit GDS interest on the fourth of August is not the beginning of economic recovery but of economic recession by all means. It is wise not to confuse indicators. [More]
    How does the fall in import demand lead to the appreciation of Turkish lira
    Güven Sak, PhD 04 August 2009
    These are weird days. These are the days where there is a high possibility that it is not logical to say what comes to your mind first. These are the days where the possibility that nothing is as it seems must be considered; because these are not some of the days we are accustomed to. In such days, there is no option other than starting over. It is necessary to develop bit by bit a new approach pertaining to how things work. This is what must be done for economics as well. We have never seen such an economic crisis before. Treatment starts when the patient accepts that he is sick. In economics, the starting point for acknowledging what is new is accepting that we are in a period the dynamics of which we are not accustomed to. Starting point for finding the remedy is seeking a new remedy. F [More]
    Informal economy and unemployment
    Fatih Özatay, PhD 03 August 2009
    Yesterday I mentioned how fighting with informal economy becomes more unavoidable for Turkey day by day. And obviously, the way to start the fight is launching a tax reform. Implementing such a reform might have significant political costs. There are also other risks that reduce the possibility for politicians to initiate tax reforms. [More]
    Starting with the informal economy?
    Fatih Özatay, PhD 02 August 2009
    Economic policies to increase domestic savings rate are discussed increasingly in the recent period. Korkmaz İlkorur, who frequently emphasizes that Turkey has to go through a radical economic transformation to achieve a higher sustainable growth rate and underlines that there are several reform areas to serve this purpose in particular at micro level, addressed this issue in his column in Radikal daily on Thursday. [More]
    Waste of time
    Fatih Özatay, PhD 30 July 2009
    In the last two articles I started to seek rough answers for the question how sustainable growth rate can be raised after the end of sharp contractionary period we are in. as you might note, the question is not on how we can overcome the contraction we are currently faced with. It is on sustainable growth rate of Turkey, thus is does not focus on the short term. Of course, the solution considered for the medium term might have a positive impact on the short term growth rate. For instance, you launch a highly credible reform program that everyone develops a brighter outlook on future of the economy in advance. Consumer and investor confidence improves and demand starts to go up. Moreover, Turkey can receive a bigger share from foreign capital the amount of which will be lower in the upcomin [More]
    Valuable Turkish Lira pushes up unemployment further
    Güven Sak, PhD 30 July 2009
    We started the week saying "Cause of valuable Turkish Lira is the rise in unemployment". Today, let us proceed saying "Valuable Turkish lira pushes up unemployment further". Let us try to understand the dynamics of the economic recession period we are faced with considering Turkey and similar countries so that we can implement measures. [More]
    Cause of valuable Turkish Lira is the rise in unemployment
    Güven Sak, PhD 28 July 2009
    We are not accustomed to recessionary periods. No one has yet completely acknowledged that nothing will be the same. Everyone is waiting with hope to say "it was a storm and it ended. We are just soaked a little bit". But, they fail to notice the changes happening in the meanwhile. See, for instance, Turkish lira is appreciating nowadays. Turkish lira used to appreciate as a result of the confidence in Turkey's economy. As the credibility of government policies increased, Turkish lira appreciated against foreign currencies. Nowadays, Turkish lira is also appreciating. So, what happens now? Is the confidence in the policies implemented by the government rises? No, from where did you get that impression? This would only be an oxymoron. Can we talk about the credibility of a policy that is no [More]
    Fund flows between states
    Fatih Özatay, PhD 27 July 2009
    The question we asked yesterday was: If in the 'new financial system' amount of foreign funds will be lower; how can we achieve high growth? Here, financial sector refers to global financial system. One way to achieve this is increasing domestic savings rate. Second is, as Turkey, contributing in the design of the way the new financial system transfers funds to countries like Turkey. Third can be focusing on reforms that directly improve the competitiveness of Turkey and level of per capita income. [More]
    On savings rate
    Fatih Özatay, PhD 26 July 2009
    Low domestic savings rate and the problems it causes are being discussed more frequently in the recent period. I also wrote a couple of commentaries on this issue. There are several reasons why low savings rate is being frequently discussed. [More]