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    Precondition of increasing production is to increase domestic demand
    Fatih Özatay, PhD 12 April 2009
    The most interesting data announced last week was the data on automotive sector. Because the data announced was for the month where a significant tax cut was introduced. As you might remember, I was skeptic about the arguments about what this tax cut will enable (see the column on March 19). Because, 80 percent of the sector's production was exported and as they had nothing to do with exports, tax cut was related only with the 20 percent of production. On the other hand, more than fifty percent of the vehicles sold in domestic market were imported. The rate for automobiles was almost 70 percent. Under these circumstances, tax cut was expected principally to be in favor of imports while its impact on production will be highly limited. [More]
    Honorable Prime Minister of Turkey, have you ever watched “Alo Presidente”?
    Güven Sak, PhD 11 April 2009
    Please watch. Did you know that Hugo Chavez Frias, President of Venezuela, is also a television star in Venezuela? Yes, he is literally a television star. Since 1999, Chavez is both governing the country and hosts, directs and designs a weekly talk show. And Alo Presidente (Hello President) is the name of that show. When took over the office, President Obama immediately revised the web site of the White House and promised the public an "open government". Accordingly, the decisions made or to be made would be as transparent as possible and the comments of the public would be received. In this sense, "Alo Presidente" of President Chavez becomes "wide-open government" rather than "open government". Let us see why. [More]
    Apart from what the Central Bank has done...
    Fatih Özatay, PhD 09 April 2009
    The academic study I have been working on for a while has turned into an article and has been sent to relevant agencies. Before starting to work on another article, it is necessary to take a break for a couple of days to tidy up the worktables at work and at home, to file the articles and worksheets used, take a copy of the article and the computer program including the computations made during the study and of course to have a peace of mind. Because, the future work schedule is loaded. It is time to effectuate the project on writing a book about financial crises; a couple of old studies will be reorganized; new academic semester is starting and I will offer a course; and some of the topics of the researches at TEPAV must be seized. Moreover, I have to put Erdal and Gülbin into motion to c [More]
    “Masallah, you are doing very very well”
    Güven Sak, PhD 09 April 2009
    State Minister Mehmet Şimşek addressed to corporate sector, banking sector, households and in general all of us "masallah, you are doing very very well". I wonder what is that we miss but honorable State Minister see. [More]
    Obama asked Turkey to dance. But, is Turkey ready?
    Güven Sak, PhD 07 April 2009
    Barack Hussein Obama, President of the United States of America (USA) came to Turkey at the last stop of his Europe travel. It is possible to attach a number of meanings to this visit; however, we believe that there is a single objective: to make damage control. After the Bush administration dominated by unilateral decisions, the top priority in the US agenda is fixing the damages in the relations between allies. Therefore, damage control for Turkish-American relations was initiated with the visit of Obama to Turkey. And it started with a quite healthy offer. Let us see what is that offer. [More]
    Exchange rate and illegal use of electricity
    Fatih Özatay, PhD 06 April 2009
    Last week, important figures were announced: We learned growth rate in 2008, temporary export figures and inflation rate for. Before that, confidence index figures were released. Moreover, we learned the loan figures regularly announced on a weekly basis. There are no positive developments except for inflation (core inflation) rate. Therefore, there is no news. Of course, these figures pertain to the 'past'. [More]
    Once again on confidence
    Fatih Özatay, PhD 05 April 2009
    We all know that among the main determinants of consumer and investor behaviors are the confidence in the future of the economy. It is both what economics theory says and what we observe in things going around us. The same result is also observed if the things going on around us are examined in a text book style utilizing some technical models. Confidence is a significant determinant of private sector investments. Applied studies show that, in such environments, 'let us wait and see, the we do what is necessary' type of approach is quite prevalent among consumers. [More]
    Crisis crier or justified warnings?
    Fatih Özatay, PhD 02 April 2009
    There are two arguments about the crisis and they are almost bonded to each other. I think they are really interesting. These arguments were stated politically. However, when taking a closer look on them, it is quite weird that these arguments were stated 'even' politically. In other words, the interestingness stems from this weirdness. First is the known 'The crisis was not our fault' argument stated in response to rapidly increasing unemployment rate and falling production levels. Second is the accompanying 'However, 2001 crisis was the fault of current opponent parties' argument. [More]
    Why does the popularity of rightist Erdoğan go down while that of leftist Lula goes up?
    Güven Sak, PhD 02 April 2009
    It seems that the situation is genuinely bad. Moreover, things are not getting any better for the last five months. While rules are doing nothing bur wasting time for election campaigns, it seems that we citizens are encountering worse conditions day by day. Turkish Statistical Institute (TURKSTAT) made an announcement this week and that the Turkish economy contracted in the last quarter of 2008 was officially confirmed. Figures announced by TURKSTAT say that the Turkish economy grew only by 1.1 percent. If the figures were not revised, overall growth rate for 2008 would have been 0 as the economy contracted by 6.2 percent in the last quarter of 2008. Thanks to the positive revisions made in previous quarters, growth rate did not stand at 0 but jumped up to 1.1 percent. But, does it make a [More]
    “This issue is economic!”
    Güven Sak, PhD 31 March 2009
    In the elections carried out last weekend, votes for the ruling party decreased by around 20 percent. You can say "The crisis did not originate in Turkey. It was transmitted from abroad to Turkey. We have no fault with this respect" as much as you want. But it does not matter. The global crisis is now the economic crisis of Turkey. Shut down businesses, workers that lost their jobs, reduced production level are all an evidence for this. The only thing the results of the elections carried out last Sunday and in particular distribution of votes for Provincial Council show is that the global crisis has currently become the economic crisis of Turkey. Of course, this will be evident only to those that are able to acknowledge. Why the ruling party lost around 20 percent of the votes will certain [More]