How can Turkey become world’s 10th largest economy with these pavements?
12 December 2011
I spent the last week in three different cities: three days in Istanbul, two days in Paris and two days in Ankara. Lately, whenever I leave Ankara, questions about city planning run through my mind. The biggest question I had after the two days in Paris was, “If Paris is a city, what is Ankara?”
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A positive but insufficient step
Fatih Özatay, PhD
10 December 2011
This step is insufficient to relieve markets. Europe was in a vibrant mood for the last two days. First, the European Banking Authority (EBA) and then the European Central Bank (ECB) have declared policy decisions. Then on Thursday evening, European leaders met and hold a summit that lasted until Friday morning. First problems handled, and then the decisions taken:
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Russia voted for instability!
Güven Sak, PhD
10 December 2011
Russia was the first to transform, and Soviet nondemocratic elections gave way to ones scarcely better. Recent surveys indicate Egypt has the same tendency. Elections for the 450-seat Russian State Duma, the lower house of the Federal Assembly of Russia, were held Dec. 4, 2011. United Russia, the party of Vladimir Putin and Dmitry Medvedev, won only 49.5 percent of the popular vote, down from 64 percent in the 2007 elections. United Russia lost its absolute majority necessary to change the Russian constitution singlehandedly. They previously did this to enable the Putin-Medvedev job-swap. Looking at election results, is it fair to say that Russia voted for instability this time? I am worried about these results, despite the anti-Putin protests. Now I love democracy just as muc
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Would you let your daughter marry an entrepreneur?
Güven Sak, PhD
09 December 2011
A good education is the foundation of entrepreneurship. A person who is not aware of the world cannot become an entrepreneur, particularly in the current era. Last week, the Second Annual Entrepreneurship Summit was held in Istanbul. The first meeting was held in Washington under the auspices of US president Barack Obama. The second summit, in Turkey, was hosted by prime minister Erdoğan, and the third summit will take place in the United Arab Emirates. Obama would have attended the summit in Istanbul if the US elections had not been so close; he was unable to find time for the meeting in his schedule. US vice-president Biden attended the summit in his place. The meeting was not composed of boring sessions about the definition and the history of entrepreneurship. The main purpose was to ce
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IMF’s unpleasant birthday present for the “new” monetary policy
08 December 2011
The Central Bank of the Republic of Turkey (CBT) is trying to deal with bad news coming with domino effect lately. The latest surprise (!) was made by the International Monetary Fund (IMF), yesterday. The staff report for the Article IV consultation by the IMF focused on monetary policy, thus, the CBT. The report criticized the CBT as follows:
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Will Europe face credit contraction?
Fatih Özatay, PhD
08 December 2011
As calculations of the newly established European Banking Authority suggest, total capital gap of European banks amounts €106 billion. There are a few days before we learn the third quarter growth rate. Next year’s growth performance is of course of higher importance. All estimations including the official one declared in the Medium Term Program state that Turkey’s growth rate will decrease considerably in 2012. The level of growth and the risk of economic contraction relates closely to developments in Europe.
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Syria, Turkey and the Kurds
Nihat Ali Özcan, PhD
08 December 2011
Syria is not falling off the agenda of the world media and politicians. Everybody relevant keeps on commenting on the point the problem has come to and what will happen. However, the most important question to be answered is this: When Bashar al-Assad falls, what happens next? Of course, it is not possible to indicate a certain date and tell what will happen like a fortune teller. But, by following the Kurds’ road map in Syria, one can largely predict whether the problem has reached a critical threshold and what might happen with the Kurds in a post-al-Assad era.
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How many centimeters of subway line have been constructed in Ankara since Karayalçın?
Güven Sak, PhD
06 December 2011
Local politics concentrate on business follow-ups in Ankara. Ministries, meanwhile, will have to focus on fulfilling the demands of interests instead of on policy making. Yesterday, I realized that I have not been writing any commentaries about Ankara. I have been living in Ankara since 1979, when I moved here from Bursa to study. I write assertively about national and world matters, but I do not write at all about the city in which I live. Is this normal? I don’t think so. It is a deficiency of Turkey that there are no economists in universities studying the competitiveness of cities.
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Will inflation rate increase further?
Fatih Özatay, PhD
06 December 2011
The upwards trend in inflation will be temporary. Inflation figures for November were announced. Annual increase in consumer prices reached 9.5 percent. Year end inflation for 2011 is expected to be around 10 percent. It appears that two elements were determinant of the rise in inflation: first, price of non-processed food products increased rapidly. Second, impact of the tax arrangements persisted in November, as well. None of these elements, however, have any significance for inflation dynamics unless inflation disrupts expectations and affect future contracts and thus push up the pace of increase in costs up. Still, let me check core indicators before reaching such an optimistic conclusion.
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To unify the BRSA and the CBT?
Fatih Özatay, PhD
03 December 2011
In the context of what we have experienced since the late 2010, I believe it will be useful to discuss unifying the BRSA and the CBT. There is a common belief that monetary policy practices of developed countries also played a role in the process that dragged us towards the global crisis. Due to this, there is an ongoing quest for a new academic framework for monetary policy. Some monetary economists are trying to answer the question, “What type of inflation targeting regime can protect financial stability as well as price stability?” There have already been released a couple of qualified academic studies. I said ‘some monetary economists’ since some studies do not necessarily limit themselves to inflation targeting regimes. Today let me address some preliminary findings of these.
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