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The Turkish Economy after the Global Financial Crisis

Author

Listed:
  • Dani Rodrik

    (Harvard Kennedy School)

Abstract

The global financial crisis has demonstrated that a financially open economy has many areas of vulnerability. Even when a country keeps its own house in order, it remains at the mercy of developments in external financial markets. So, one lesson to bear in mind is that policymakers need to guard against not just domestic shocks, but also shocks that emanate outward from financial instability elsewhere. To accomplish this, complete financial openness is not the best policy. A second lesson is that Turkey’s prevailing growth strategy can neither be sustained nor generate enough employment. Therefore, it would be a mistake for the country to return to the status quo ante and resuscitate a model that fails to make adequate use of domestic resources. Most importantly, Turkey has to learn to live with a reduced reliance on external borrowing. The paper discusses the needed realignments in fiscal and exchange-rate policies.

Suggested Citation

  • Dani Rodrik, 2012. "The Turkish Economy after the Global Financial Crisis," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 1(1), pages 41-61, January.
    • Handle: RePEc:tek:journl:v:1:y:2012:i:1:p:41-61
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    References listed on IDEAS

    as
    1. Serra, Narcis & Stiglitz, Joseph E. (ed.), 2008. "The Washington Consensus Reconsidered: Towards a New Global Governance," OUP Catalogue, Oxford University Press, number 9780199534098.
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    5. Ricardo Hausmann & Bailey Klinger, 2008. "Growth Diagnostics: Perú," Research Department Publications 2005, Inter-American Development Bank, Research Department.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Gunes, Pinar Mine & Ural Marchand, Beyza, 2020. "Macroeconomic conditions and child schooling in Turkey," Labour Economics, Elsevier, vol. 63(C).
    2. Xiaojuan He & Dervis Kirikkaleli & Melike Torun & Zecheng Li, 2021. "Modeling Economic Risk in the QISMUT Countries: Evidence From Nonlinear Cointegration Tests," SAGE Open, , vol. 11(4), pages 21582440211, October.
    3. Zafer Adali & Bilgin Bari, 2017. "Monetary Policy And Bank Lending Chanel in Turkey," International Journal of Finance & Banking Studies, Center for the Strategic Studies in Business and Finance, vol. 6(2), pages 24-36, April.
    4. Xanthippe Adamoglou & Yannis Hajidimitriou, 2021. "The Impact of Institutional Transformations on MNEs Entrepreneurship in Emerging Economies," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 71(3-4), pages 48-66, July-Dece.
    5. Beniamino Moro, 2013. "The Run On Repo and the Liquidity Shortage Problems of the Current Global Financial Crisis: Europe vs. The US," Ekonomi-tek - International Economics Journal, Turkish Economic Association, vol. 2(1), pages 41-77, January.
    6. Ali, Amjad & Ur Rehman, Hafeez, 2015. "Macroeconomic Instability and Its Impact on Gross Domestic Product: An Empirical Analysis of Pakistan," MPRA Paper 71037, University Library of Munich, Germany.
    7. Erik Meyersson, 2017. "Pious populists at the gate," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 25(2), pages 271-312, April.
    8. Vasif Abioglu & Suleyman Koc & Ibrahim Bakirtas, 2021. "The sustainability of the Turkish current account: Smooth structural break and asymmetric adjustments," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(3), pages 3916-3929, July.
    9. Coskun Yener & Jadevicius Arvydas, 2017. "Is there a Housing Bubble in Turkey?," Real Estate Management and Valuation, Sciendo, vol. 25(1), pages 48-73, March.
    10. Hasan Yildizhan & Cihan Yıldırım & Shiva Gorjian & Arman Ameen, 2023. "How May New Energy Investments Change the Sustainability of the Turkish Industrial Sector?," Sustainability, MDPI, vol. 15(2), pages 1-15, January.
    11. Fung, Ka Wai Terence & Demir, Ender & Lau, Marco Chi Keung & Chan, Kwok Ho, 2013. "An Examination of Sports Event Sentiment: Microeconomic Evidence from Borsa Istanbul," MPRA Paper 52874, University Library of Munich, Germany.
    12. Nuray Terzi, 2013. "Capital Flows and Policy Reforms in Turkey After the Crises," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 2, October.
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    14. Savaş ÇEVİK, 2015. "Domestic Saving and Tax Structure: Evidence from Turkey," Sosyoekonomi Journal, Sosyoekonomi Society, issue 23(23).
    15. Mehmet Balcilar & Evrim Toren, 2021. "The Time-Varying Effect of Asset Prices on Turkey’s Circular Economy," Sustainability, MDPI, vol. 13(22), pages 1-16, November.

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    More about this item

    Keywords

    Turkish economy; financial crisis; financial open economy; fiscal and exchange rate polcies;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • G01 - Financial Economics - - General - - - Financial Crises
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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