BibTex RIS Cite

POLICY ISSUES AND THE 2001 CRISIS

Year 2006, Volume: 2 Issue: 4, 63 - 77, 01.12.2006

Abstract

This article takes up the subject of policy prescriptions and offers a particular policy implication for Turkey’s latest currency crisis. After the outbreak of the East Asian crises, the IMF initially implemented a set of macroeconomic policies so as to reestablish financial market confidence in those countries. A number of prominent economists heavily criticized the IMF’s macroeconomic programs and argued that its contractionary programs exacerbated the turmoil in the markets rather than actually improving it. The IMF’s view and the views of its critics are briefly introduced in the initial section. Their relevance and usefulness for Turkey are then assessed on the basis of the circumstances in the country. After these assessments, it is concluded that neither the IMF view nor the views of its critics perfectly suits Turkey and a combination of both views a contractionary fiscal and an expansionary monetary policy provides the best policy mix for reestablishing market confidence

References

  • Agenor, P., J. Bhandari and R. Flood (1994), “Macroeconomic Policy, Speculative Attacks, and Balance of Payments Crises”, The Handbook of International Macroeconomics, (Ed. F. Van Der Ploeg)
  • Akcay, O.C., Alper, C. and Ozmucur, S. (2001) “Budget Deficit, Inflation and Debt Sustainability: Evidence From Turkey (1970-2000)”, Bogazici University, Is- tanbul.
  • Ball, L. and G.A. Mankiw (1995), “What do Budget Deficits do?”, NBER Working Paper, No. 5263, New York.
  • Blanco, H. and P.M. Garber (1986), “Recurrent Devaluation and Speculative At- tacks on the Mexican Peso”, Journal of Political Economy, Vol.94, No.1, pp. 149-166.
  • Bordo, D. M. and J.A. Schwartz (1996), “Why Clashes between Internal and Exter- nal Stability Goals end in Currency Crises, 1797-1994”, NBER Working Paper No. 5710, New York.
  • Buiter, W. H. (1987), “Borrowing to Defend the Exchange Rate and the Timing of and Magnitude of Speculative Attacks”, Journal of International Economics, Vol. 23, pp. 221-39.
  • Burnside, C., M. Eichenbaum, S. Rebelo (2001), “Prospective Deficits and Asian Currency Crisis”, Journal of Political Economy, Vol. 109, No.6, pp. 1155- 1197.
  • Calvo, G. (1996), “Capital Flows and Macroeconomic Management: Tequila Les- sons”, International Journal of Finance and Economics, Vol.1, pp. 207-24.
  • _________ (1996), “Varieties of Capital Market Crises”, http://www.bsos.umd.edu/econ/cie crp3.pdf (last entrance: 12.12.2006)
  • Chang, R., and A. Velasco (1998), “The Asian Liquidity Crisis”, NBER Working Paper No. 6796, New York.
  • Cole, H. and T. Kehoe (1996), “A Self-Fulfilling Model of Mexico’s 1994-1995 Debt Crisis”, Journal of International Economics, Vol. 41, pp. 309-30.
  • _________ (1998), “Self-Fulfilling Debt Crises”, Federal Reserve Bank of Minnea- polis, No.211.
  • Dornbusch, R. (2001), “A Premier on Emerging Market Crises”, NBER Working Paper, No. 8326, New York.
  • Eichengreen, B., K.A. Rose, and C., Wyplosz, (1995), “Exchange Market Mayhem the Antecedents and Aftermath of Speculative Attacks”, Economic Policy, Vol.10, No. 21, pp. 249-312.
  • _________ (1998), “Contagious Currency Crises: First Tests”, Scandinavian Jour- nal of Economics, Vol. 98, No. 4, pp. 463-484.
  • Eichengreen, B. and A. Rose (1998/9), “The Empirics of Currency and Banking Crises”, NBER Reporter, New York.
  • Fischer, S. (1998a), “The Asian Crisis: A View from the IMF,” January. http://www.imf.org/ external/np/speeches/1998/012298.htm (Last Entrance: 12.12.2006).
  • _________ (1998b), “The IMF and the Asian Crisis,” http://www.imf.org/external/ np/speeches/1998/032098.htm (Last Entrance: 12.12.2006).
  • Flood, R. and P. Garber (1984), “Collapsing Exchange Rate Regimes. Some Linear Examples”, Journal of International Economics, Vol.17, pp. 1-13
  • Flood, R.P., P. Garber, and C. Kramer (1996), “Collapsing Exchange Rate Regimes: Another Linear Example”, Journal of International Economics, Vol. 41, pp. 223-34.
  • Flood, R. and P.N. Marion (1998), “Perspectives on the Recent Currency Crisis Literature”, IMF Working Paper, Washington.
  • _________ (2000), “Self-Fulfilling Risk Predictions: An Application to Speculative Attacks”, Journal of International Economics, Vol. 50, pp. 245-68.
  • Frankel, J. and A. Rose (1995), “Empirical Research on Nominal Exchange Rates”, Handbook of International Economics, Vol.3, pp. 1689-1729.
  • _________ (1996), “Currency Crashes in Emerging Markets: An Empirical Treat- ment”, Journal of International Economics, Vol. 41, pp. 351-366.
  • Furman, Jason and J.E. Stiglitz (1998), “Economic Crises: Evidence and Insights from East Asia”, Brooking Papers on Economic Activity, No.2, p.1-114
  • Goldberg, S. L. (1994), “Predicting Exchange Rate Crisis; Mexico Revisited”, Jour- nal of International Economics, Vol. 36, pp. 413-430.
  • Kaminsky, L. G. and C. Reinhart (1999), “The Twin Crises: The Causes of Banking and Balance of Payments Problems”, American Economic Review,Vol. 89, No.3, pp. 473-500.
  • _________ (1998), “Financial Crises in Asia and Latin America: Then and Now”, AEA Papers and Proceedings, pp. 444-448.
  • Kaminsky, L.G., S. Lizando, and C. Reinhart (1998), “Leading Indicators of Cur- rency Crises”, IMF Staff Papers, Vol. 45, No. 1, pp.1-48.
  • Krugman, Paul (1979), “Model of Balance of Payments Crises”, Journal of Money, Credit and Banking, Vol.11, pp.311-325.
  • _________ (1996), “Are Currency Crises Self-Fulfilling?”, NBER Macroeconomics Annual, Vol.11, New York.
  • _________ (1999), “Balance Sheets, the Transfer Problem, and Financial Crises”, Mimeo, M.I.T.
  • _________ (1999), “Analytical Afterthoughts on the Asian Crisis”, MIT, Boston.
  • Mishkin, S. F. (1996), “Understanding Financial Crises: A Developing Country Perspective”, NBER Working Paper, No 5600, New York.
  • Obstfeld, M. (1984), “Balance-of-Payments Crises and Devaluation”, Journal of Money, Credit, and Banking, Vol. 16, No. 2, pp. 208-217.
  • _________ (1997), “Open-Economy Macroeconomics: Developments in Theory and
  • Policy”, NBER Working Paper, No: 6319, New York.
  • _________ (1998), “The Global Capital Market: Benefactor or Menace?”, Journal of Economic Perspectives, Vol. 12, No. 4, pp.9-30.
  • Otker, Inci and C. Pazarbasioglu (1995), “Speculative Attacks and Currency Crises: The Mexican Experience”, IMF Working Paper, No: 95/112, pp. 24-44.
  • Radelet, S., and J. Sachs (1998), “The East Asian Financial Crisis: Diagnosis, Remedies, Prospects”, Brookings Papers on Economic Activity, No.1, pp.1-74.
  • _________ (2000), “The Onset of the East Asian Crisis,” Currency Crises, (Ed. Paul Krugman), the University of Chicago Press, Chicago.
  • Rodrik, D. and A. Velasco (1999), “Short-Term Capital Flows”, NBER Working Papers, No. 7364, New York.
  • Sachs, J., A. Tornell, and A. Velasco (1996), “The Mexican Peso Crisis: Sudden Death or Death Foretold?”, Journal of International Economics, Vol. 41, pp. 265-83.
  • _________ (1996), “Financial Crises in Emerging Markets: The Lessons from 1995”, NBER Working Paper, No.5576, New York.
  • _________ (1997), “Alternative Approaches to Financial Crises in Emerging Mar- kets”, Development Discussion Paper, No.568, Harvard University.

POLİTİKA TARTIŞMALARI VE 2001 KRİZİ

Year 2006, Volume: 2 Issue: 4, 63 - 77, 01.12.2006

Abstract

Bu makale alternatif politika seçeneklerini tartışmakta ve Türkiye’nin en son döviz krizine en uygun olan bir politika seçeneği sunmaktadır. Uzakdoğu krizlerinin çıkmasından sonra, IMF bu ülkelerde yeniden mali güveni tesis etmek için bir dizi makro-iktisat politikaları uyguladı. Bazı önemli iktisatçılar IMF’nin bu politikalarını ağır bir biçimde eleştirdiler ve IMF’nin daraltıcı poltiklarının krizi gidermek yerine daha da ağırlaştırdığını iddia ettiler. IMF ve karşıtlarının politika önerileri ilk bölümde özetlenmektedir. Daha sonra Türkiye’nin kendi koşullarında IMF ve karşıtlarının politika önerilerinin Türkiye’ye uygulanabilirliği tartışılmakta; netice olarak ne IMF ne de karşıtlarının politika önerilerinin tam olarak uygun olmadığı kanaatine varılmaktadır. Her iki görüşün bir kombinasyonu olan daraltıcı maliye ve genişletici para politikalarının birlikte uygulanmasının ideal olduğu ileri sürülmektedir

References

  • Agenor, P., J. Bhandari and R. Flood (1994), “Macroeconomic Policy, Speculative Attacks, and Balance of Payments Crises”, The Handbook of International Macroeconomics, (Ed. F. Van Der Ploeg)
  • Akcay, O.C., Alper, C. and Ozmucur, S. (2001) “Budget Deficit, Inflation and Debt Sustainability: Evidence From Turkey (1970-2000)”, Bogazici University, Is- tanbul.
  • Ball, L. and G.A. Mankiw (1995), “What do Budget Deficits do?”, NBER Working Paper, No. 5263, New York.
  • Blanco, H. and P.M. Garber (1986), “Recurrent Devaluation and Speculative At- tacks on the Mexican Peso”, Journal of Political Economy, Vol.94, No.1, pp. 149-166.
  • Bordo, D. M. and J.A. Schwartz (1996), “Why Clashes between Internal and Exter- nal Stability Goals end in Currency Crises, 1797-1994”, NBER Working Paper No. 5710, New York.
  • Buiter, W. H. (1987), “Borrowing to Defend the Exchange Rate and the Timing of and Magnitude of Speculative Attacks”, Journal of International Economics, Vol. 23, pp. 221-39.
  • Burnside, C., M. Eichenbaum, S. Rebelo (2001), “Prospective Deficits and Asian Currency Crisis”, Journal of Political Economy, Vol. 109, No.6, pp. 1155- 1197.
  • Calvo, G. (1996), “Capital Flows and Macroeconomic Management: Tequila Les- sons”, International Journal of Finance and Economics, Vol.1, pp. 207-24.
  • _________ (1996), “Varieties of Capital Market Crises”, http://www.bsos.umd.edu/econ/cie crp3.pdf (last entrance: 12.12.2006)
  • Chang, R., and A. Velasco (1998), “The Asian Liquidity Crisis”, NBER Working Paper No. 6796, New York.
  • Cole, H. and T. Kehoe (1996), “A Self-Fulfilling Model of Mexico’s 1994-1995 Debt Crisis”, Journal of International Economics, Vol. 41, pp. 309-30.
  • _________ (1998), “Self-Fulfilling Debt Crises”, Federal Reserve Bank of Minnea- polis, No.211.
  • Dornbusch, R. (2001), “A Premier on Emerging Market Crises”, NBER Working Paper, No. 8326, New York.
  • Eichengreen, B., K.A. Rose, and C., Wyplosz, (1995), “Exchange Market Mayhem the Antecedents and Aftermath of Speculative Attacks”, Economic Policy, Vol.10, No. 21, pp. 249-312.
  • _________ (1998), “Contagious Currency Crises: First Tests”, Scandinavian Jour- nal of Economics, Vol. 98, No. 4, pp. 463-484.
  • Eichengreen, B. and A. Rose (1998/9), “The Empirics of Currency and Banking Crises”, NBER Reporter, New York.
  • Fischer, S. (1998a), “The Asian Crisis: A View from the IMF,” January. http://www.imf.org/ external/np/speeches/1998/012298.htm (Last Entrance: 12.12.2006).
  • _________ (1998b), “The IMF and the Asian Crisis,” http://www.imf.org/external/ np/speeches/1998/032098.htm (Last Entrance: 12.12.2006).
  • Flood, R. and P. Garber (1984), “Collapsing Exchange Rate Regimes. Some Linear Examples”, Journal of International Economics, Vol.17, pp. 1-13
  • Flood, R.P., P. Garber, and C. Kramer (1996), “Collapsing Exchange Rate Regimes: Another Linear Example”, Journal of International Economics, Vol. 41, pp. 223-34.
  • Flood, R. and P.N. Marion (1998), “Perspectives on the Recent Currency Crisis Literature”, IMF Working Paper, Washington.
  • _________ (2000), “Self-Fulfilling Risk Predictions: An Application to Speculative Attacks”, Journal of International Economics, Vol. 50, pp. 245-68.
  • Frankel, J. and A. Rose (1995), “Empirical Research on Nominal Exchange Rates”, Handbook of International Economics, Vol.3, pp. 1689-1729.
  • _________ (1996), “Currency Crashes in Emerging Markets: An Empirical Treat- ment”, Journal of International Economics, Vol. 41, pp. 351-366.
  • Furman, Jason and J.E. Stiglitz (1998), “Economic Crises: Evidence and Insights from East Asia”, Brooking Papers on Economic Activity, No.2, p.1-114
  • Goldberg, S. L. (1994), “Predicting Exchange Rate Crisis; Mexico Revisited”, Jour- nal of International Economics, Vol. 36, pp. 413-430.
  • Kaminsky, L. G. and C. Reinhart (1999), “The Twin Crises: The Causes of Banking and Balance of Payments Problems”, American Economic Review,Vol. 89, No.3, pp. 473-500.
  • _________ (1998), “Financial Crises in Asia and Latin America: Then and Now”, AEA Papers and Proceedings, pp. 444-448.
  • Kaminsky, L.G., S. Lizando, and C. Reinhart (1998), “Leading Indicators of Cur- rency Crises”, IMF Staff Papers, Vol. 45, No. 1, pp.1-48.
  • Krugman, Paul (1979), “Model of Balance of Payments Crises”, Journal of Money, Credit and Banking, Vol.11, pp.311-325.
  • _________ (1996), “Are Currency Crises Self-Fulfilling?”, NBER Macroeconomics Annual, Vol.11, New York.
  • _________ (1999), “Balance Sheets, the Transfer Problem, and Financial Crises”, Mimeo, M.I.T.
  • _________ (1999), “Analytical Afterthoughts on the Asian Crisis”, MIT, Boston.
  • Mishkin, S. F. (1996), “Understanding Financial Crises: A Developing Country Perspective”, NBER Working Paper, No 5600, New York.
  • Obstfeld, M. (1984), “Balance-of-Payments Crises and Devaluation”, Journal of Money, Credit, and Banking, Vol. 16, No. 2, pp. 208-217.
  • _________ (1997), “Open-Economy Macroeconomics: Developments in Theory and
  • Policy”, NBER Working Paper, No: 6319, New York.
  • _________ (1998), “The Global Capital Market: Benefactor or Menace?”, Journal of Economic Perspectives, Vol. 12, No. 4, pp.9-30.
  • Otker, Inci and C. Pazarbasioglu (1995), “Speculative Attacks and Currency Crises: The Mexican Experience”, IMF Working Paper, No: 95/112, pp. 24-44.
  • Radelet, S., and J. Sachs (1998), “The East Asian Financial Crisis: Diagnosis, Remedies, Prospects”, Brookings Papers on Economic Activity, No.1, pp.1-74.
  • _________ (2000), “The Onset of the East Asian Crisis,” Currency Crises, (Ed. Paul Krugman), the University of Chicago Press, Chicago.
  • Rodrik, D. and A. Velasco (1999), “Short-Term Capital Flows”, NBER Working Papers, No. 7364, New York.
  • Sachs, J., A. Tornell, and A. Velasco (1996), “The Mexican Peso Crisis: Sudden Death or Death Foretold?”, Journal of International Economics, Vol. 41, pp. 265-83.
  • _________ (1996), “Financial Crises in Emerging Markets: The Lessons from 1995”, NBER Working Paper, No.5576, New York.
  • _________ (1997), “Alternative Approaches to Financial Crises in Emerging Mar- kets”, Development Discussion Paper, No.568, Harvard University.
There are 45 citations in total.

Details

Primary Language English
Journal Section Research Article
Authors

Hakan Sarıbaş This is me

Publication Date December 1, 2006
Published in Issue Year 2006 Volume: 2 Issue: 4

Cite

APA Sarıbaş, H. (2006). POLICY ISSUES AND THE 2001 CRISIS. Uluslararası Yönetim İktisat Ve İşletme Dergisi, 2(4), 63-77.