Policy uncertainty is bad for the recovery process.
Güven Sak, PhD
13 July 2010
Policy uncertainty does not necessarily follow from political uncertainty. Political uncertainty implies that it is not certain who will govern. On the other hand, policy uncertainty implies that even it is certain who will govern; it is not certain which policy the government will choose. In other words, government policies keep changing continuously and unpredictably (does this sound familiar?). I started to think that in the current milieu, the intense policy uncertainty started to hinder more and more the economic recovery process. Recently, I heard the complaints of Jeffrey Immelt, General Electric CEO, on the US government and decided to note down what I think about this issue. Do not say "An elected government cannot be in policy uncertainty." First, hear me. Those of you interested
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Swinging the lead
Fatih Özatay, PhD
12 July 2010
An inflation targeting regime that takes into account the real value of exchange rate after ensuring a low level of inflation. A regular foreign exchange purchase program as far as applicable that also makes sure that the resultant liquidity injection to the market does not lead to an inflationary pressure. Searching for ways to prevent short term capital inflows and for international cooperation possibilities to this end. An implementation framework that will secure the sustainability of fiscal discipline in order to create the environment suitable for taking the mentioned steps. A structural reform attack which realizes that the main factor that will improve Turkey's international competitiveness is to enhance the productivity of firms.
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Estimating the past
Fatih Özatay, PhD
11 July 2010
Turkey's economy did not grow in the first quarter compared to the previous quarter. Last Thursday I made an assessment about economic growth for the second quarter as well as the rest of the year. The data at hand suggested that the economy will grow quarter-on-quarter. This "estimation" was based on the real credit growth, export recovery and the positive developments with respect to the capacity utilization ratio.
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All we need is courage
Fatih Özatay, PhD
08 July 2010
I guess most of you are aware that the wave of optimism of the late 2009 that the world economy will recover and growth rates will reach to reasonable levels is not felt much recently. Important economists started to write warning articles more frequently. A new fiscal stimulus package is recommended against the persistent unemployment rate in the USA. There are credible ideas that the belt-tightening measures in the European Union, particularly the decisions made in the Germany and the arguments of the President of European Central Bank, are too early.
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Soul mate of Turkey is Mexico.
Güven Sak, PhD
08 July 2010
Have you recently taken a look at Mexico's economy? I decided to do so after a recent meeting in Washington D.C. where the name of the Mexico came up frequently. For the period ahead, those wondering what we can do at G20 had better develop consultation mechanisms with Mexico. Brazil and Korea are a cut above us. They cannot be compared one-to-one with Turkey. Turkey's soul mate appears to be Mexico. Let us see why. Those who are interested are welcome to join me down the article.
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How come was Turkey offside about Iran issue?
Güven Sak, PhD
06 July 2010
The idea was neither Turkey's nor Brazil's. I remember writing about this some time ago. The idea belonged to Egyptian Muhammad Al Baradei who was the President of the Atom Energy Commission back then. The currently is on the news as a candidate for Presidency of Egypt. He has left his office at the Commission and is now busy with being a trouble for Hosni Mubarak. I remember that he had come up with this nuclear swap idea in October 2009. His objective was to activate a confidence building process among parties rather than solving the issue. Then, Turkey and Brazil stepped in. after all, they were member to the United National Security Council, though non-permanent. They believed they can accomplish the task and thus they stepped in. However, the permanent members of the UN Security Counc
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Second quarter will go well; but then what?
Fatih Özatay, PhD
05 July 2010
Today I am interested in the future growth performance of Turkey. At the first stage, I will focus on recent data and try to find out whether or not there will be a significant difference between the first and the second quarters. My objective is to estimate the pace of growth in the second quarter in comparison with the first quarter and than try to make a comment on the performance in the second half of the year.
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Why is the price reduction in electricity withdrawn?
Güven Sak, PhD
04 July 2010
Last week was quite entertaining. First, price of electricity were reduced. The next day, the reduction was withdrawn. And then, electricity price was raised. As the newspapers suggest, the Minister of Energy said: "I guess the process was disregarded." What do you think happened? Did you think what a sauciness it was? I personally did so at first. But then, I wondered the details and made a little research. Now, I do not think so. Let me tell you what I now think. Those of you who wonder are welcome to join me down the article.
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Dual-character growth performance, again
Fatih Özatay, PhD
01 July 2010
Yesterday growth rate for the first quarter was announced. As expected gross domestic product (GDP) increased significantly compared to the same period in the year before by 117 percent. The rat for the previous quarter was 6 percent. Thus, the economy has been growing for the last two quarters, which is pleasing.
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Why did the Chairman of the Joint Chiefs of Staff bring attention to public debt?
Güven Sak, PhD
29 June 2010
No, not ours. Here in our country, even the decisions that the Chief of Staff make in their own fields of expertise are questioned by the media. But I'm not going to talk about the military. This article is about the current Chairman of the Joint Chiefs of Staff of USA, Mike Mullen, and the subject he brought attention to just last week, is the issue of the size of the US debt stock. According to latest projections, the US debt stock will double up reaching 75% of the US national income, in 2015. Admiral Mullen was explaining that the US public finance was a risk for national security, in this perspective, but this was already pointed out by the US Secretary of State, Hillary Clinton, in February. Actually, the knowledgeable people say that the issue they have been talking about is also re
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