What an incentive
Fatih Özatay, PhD
14 May 2011
You have to do all it takes to change the status quo. Evidently, this cannot be done by employing disincentive mechanisms. There is a close relationship between individuals' behaviors and the way they are incentivized. This is such an important relationship in economic theory. On the other hand, it is clear that the word "incentive" (stands for 'özendirmek' in Turkish) does not always have a positive meaning; for instance, one bad friend can encourage his fellow to start smoking. This is the case also with the economics.
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Good for me!
Güven Sak, PhD
14 May 2011
Economic growth, which narrows the digital gap, also eliminates poverty. It used to be easier to categorize countries clearly. There were those that could use the Internet and those which could not. The digital gap used to be wider. The United Nations' (UN) Millennium Development Goals Report of 2008 helped us achieve a more dramatic ranking. Back then, 18 out of every 100 people in the world had access to the Internet. The ratio dropped approximately to 1 percent in Sub-Saharan Africa, which hosts the least developed countries in the world. One to eighteen is an impressive gap. Out of the 48 least developed countries of the world as given in the UN's list, 33 are in Sub-Saharan Africa. If you wonder what kind of a place that is, here it goes: in 2006, only 1 out of every 100 people had ac
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Opinion follow-up: Do the credit expansion slow down? (2)
Fatih Özatay, PhD
12 May 2011
Banks do not slow down borrowing from the CBT to compensate the fall in the amount of deposits for credits. In the first commentary of the "opinion follow-up" series written one and a half week ago, I said that I will continue with a similar topic. The main question I asked in my commentaries on the decisions of the Central Bank of Turkey (CBT) was the following: to what extent a central bank applying inflation targeting regime can slow down the credit expansion given that the liabilities of the banks are mainly short term?
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Rapid credit expansion with the eyes of others
Fatih Özatay, PhD
10 May 2011
It is needed to tighten the fiscal policy for the potential rainy days and finally not to categorically reject short term capital controls. We had better examine the rapid credit expansion issue with the eyes of others. With "others", I will refer to the IMF and address the "World Economic Outlook" report published in April 2011.
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When you turn on TRT Arabic in search of a salve, you come up with an eggplant ragout recipe in Arabic.
Güven Sak, PhD
10 May 2011
Al Fatih and Hamas recently signed a memorandum of understanding on reconciliation in Cairo. Palestinian Authority President Mahmoud Abbas had called Hamas for reconciliation. Hamas, which had been reluctant to do so before, accepted the offer this time. Today let me put the memorandum of understanding was signed in Cairo within context. I think this is a critical success for Abbas and Fayyad as well as for Egypt and is an important indicator for monitoring how the "Ihvan-i Muslimin," or the Muslim Brothers, in Egypt will engage in the region's politics. Why? Let me tell you why.
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Turkey does not speak English
Güven Sak, PhD
06 May 2011
English proficiency is an indicator of the quality of the skills set of the citizens of a country. Education First (EF) is a private English training course established in 1965. Each year it ranks countries by their proficiency in English to form a proficiency index. The English Proficiency Index of 2011 recently was published. According to this, Turkey is the forty-third among forty-four countries. It appears that we have passed only Kazakhstan in English proficiency. To check the EF's results, I referred to a more comprehensive list: TOEFL score rankings. But I think they were correct. Let us admit: Turkey does not speak English! Is this bad? Yes, indeed. In what sense? In the sense that Turkey cannot become the tenth biggest economy of the world unless it solves this problem. Let me tel
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Objecting to the categorical objection
Fatih Özatay, PhD
05 May 2011
Measures aimed at reducing short term capital inflows must not be categorically objected. The negative impact of the global crisis on our national income was eliminated as of the third quarter of 2010. On the other hand, the impact on the export performance and unemployment prevails. We are talking about a crisis the effects of which became visible as of the end of 2008. In other words, although two and a half years passed since the eruption of the crisis, the employment market could not recover and the demand for Turkey's exports did not achieve the pre-crisis levels.
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Impact of the crisis still felt on exports
Fatih Özatay, PhD
03 May 2011
The level of exports in April 2011 corresponded to 92 percent of that in July 2008. Thus, the impacts of the crisis are still felt. Association of Turkish Exporters (TİM) has announced the export figures for April: exports had a record-high (for Aprils) volume at US$ 11.8 billion indicating a 25.5 percent year-on-year increase. This is pleasing. Today I want to take a closer look at the export performance; I will focus on the TURKSTAT data announcing figures with a one-month delay.
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I sincerely congratulate the Honorable President of the ÖSYM
Güven Sak, PhD
03 May 2011
The period of change is hard work. It must be directed carefully. You will be making a mistake if you do not see that the accumulation of 37 years is Turkey's accumulation. In the first version of the commentary, the title was "ÖSYM, What the Hell!" But while I was writing, I came to a much better understanding of the meaning of the scope of incompetence demonstrated by the Student Selection and Placement Center (ÖSYM), headed by Ali Demir. I believe that there is a great story of success (!) behind making a big mess out of every stage of the duty assigned to him. No one has gone so far before. Moreover, I read the understatement of the year by the Honorable Prime Minister, highlighted in the media with the theme, "The ÖSYM President failed to manage the process well." Yes, Mr.
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How should Istanbul grow: Via unearned rent or human capital?
02 May 2011
The cost of one-year study at Harvard University equals 70 percent of the per capita income in Boston. The cost of one-year study at Koç or Sabancı University is 160 percent the per capita income in Istanbul. It is very worrisome that the income disparity in Istanbul is much greater than that in the USA, where the said problem is quite a challenge. The gap widens further when you move down from high school to kindergarten.
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