We are at a point where foreign policy will determine economic policy
Güven Sak, PhD
03 February 2009
The world has become a strange place. We are right in the middle of a global economic crisis that has deeply affected all of us and that tends to affect even further. The global crisis originated from the US. What would you expect in such a condition? You would think that "the US hegemony has come to an end", wouldn't you? However, the reality does not seem so and also does not seem to evolve in that direction. President Obama keeps saying "we are done, we are ruined" all day long, but the present tendencies indicate that the US is still an important economic actor. We are rapidly entering a new environment. If you are wondering how the US will manage to preserve its importance in this new economic environment, please go on reading.
[More]
Unfortunately, it seems like we are right...
Fatih Özatay, PhD
02 February 2009
In general, when conducting macro-level analysis, we group the economy under sectors; for examples public sector, the central bank, banks, corporate sector, households and outer world. In short, a wide-range consolidation is made. For instance, the behavior of a group of companies is examined under the context of an individual company. At times, the consolidation moves further decreasing the number of the sectors examined.
[More]
Uncertainty: Will EU reforms continue?
Fatih Özatay, PhD
01 February 2009
In my last commentary, I tried to shift my focus away the crisis and addressed the medium-long run and thus the issue of reforms. Among the barriers beyond the implementation of a series of reforms that are known or considered to be efficient in economic terms, the most important one was that the winners and the losers of the reform could not be determined in advance.
[More]
“For God’s sake, what aspect of this crisis psychological!”
Güven Sak, PhD
31 January 2009
Doomsday Superstitions Catalogue; Entry No Two: "For God's sake, what aspect of this crisis psychological!" Since the international banking crisis hit the shores of Turkey, a form of explanation that is not even slightly related with the reality began to spread around. Whenever you say the word "crisis", people, with the common pedantry of those who does not know anything, take the lead and say "hey, that is totally psychological" even before you start talking about the measures needed to be taken. They assume such an attitude as if there is no problem in reality and you had a sort of a nightmare so that all problems will disappear once you wake up. Or, as if the problem will disappear completely right away if you do not ever mention it. Well, this is not the case. The people thinking that
[More]
When the EU seems to come up in the agenda...
Fatih Özatay, PhD
29 January 2009
Currently, we are wondering what will be the magnitude of the economic contraction in 2009. The only thing we care about is whether we can decrease the size of this contraction via taking measures. Because, if it is manage, less people will lose their jobs and we will limit the rise in unemployment. However, just one and a half year ago, we were still discussing the second generation (micro) reforms. The issue considerably occupied the agenda, a lot of people started to comment and speak on the issue, which was a good thing.
[More]
It is not normal that Washington is more important than New York
Güven Sak, PhD
29 January 2009
We are in an interesting period. We are under influences that we are not used to face. It might be quite dangerous to get excited upon each development and try to react to each new development. Periods of crises are not periods for rapid action at all. The approach that shall be pursued is to limit actions to the highest extent possible and try not to waste energy. The important thing to do in busy days with different news flowing in every second is to focus on the question of the day. It is crucial to find out the question of the day for avoiding to get excited by every single development. So, what is the question of the day nowadays? A finding by an American friend summarizes the question of the day: Washington being more important than New York is not a situation we are used to see. Let
[More]
Turkey has taken the first measure against the crisis with the BRSA regulation
Güven Sak, PhD
27 January 2009
I have good news. We just saw that Turkey has the ability to be proactive. The first right step to tackle the crisis is taken. Banking Regulation and Supervision Agency (BRSA) has broadened the framework of the Reserves Regulation. First of all, it is the first time a public authority takes an action oriented towards the real problem. Secondly, Turkey has for the first time introduced a pro-active measure. This measure, though necessary, is also not sufficient. Now, it is time to take rapid new steps towards the required direction. If you are wondering what we are talking about, please keep on reading.
[More]
This was exactly what we needed now...
Fatih Özatay, PhD
26 January 2009
Global shock, and the big earthquake and then the global crisis and recession... We have been using these phrases since recently. However, we were talking about how Turkey needs to create a new wave of reforms for instance in most of 2007 and in 2006. You know, the reforms we used to call 'micro reforms' and we started to call 'second generation reforms' as we thought it implied the real meaning better. In professional terms, it was quite exciting to comment on these reforms. On the other hand, as the economists of a country that shockingly did not manage to understand the terms like 'stability', 'budget constraint' and 'disciplined economic policy' we were proud that the archaic times have passed and that it was time for saying new things considering the medium and long term.
[More]
Need for a nut-case team
Fatih Özatay, PhD
25 January 2009
Among the most unpleasant aspects of this crisis for Turkey is that it creates a great ambiguity that we cannot and will not be able to control. Measures are taken throughout the world, one after another. Nonetheless, the pessimistic climate is not disappearing. It seems like it is beginning to disappear, but the optimism lasts only for a couple of weeks. After that, new unfavorable developments appear, some people or countries are getting into trouble and the world is becoming covered by a new pessimistic climate. This implies a great ambiguity regarding what tomorrow will bring.
[More]
Is height enough for success?
Güven Sak, PhD
24 January 2009
What is the secret of success in life? Is it the chemical process a fetus is exposed to that determines the future? Or, is what we call success is just the ability to take the opportunity, which is an ability that proves itself in any case? Of course, the mentioned "ability to take the opportunity" is not a gift of the nature, but it is to be nurtured. But, how is it possible? How can one attain the ability to take the opportunity? In fact, what Joseph Nye, an international relations professor at Harvard University defines "smart power" is exactly this "ability to take the opportunity" and is nothing but the product of a series of skills. And, nowadays, it is the "ability to take the opportunity" that Turkey needs.
[More]
