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Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation

Year 2017, Volume: 5 Issue: 2, 245 - 262, 27.10.2017
https://doi.org/10.14782/sbd.2017.74

Abstract

As Turkey’s growth numbers signalled negative news about the near future, possible economic remedies to solve an upcoming economic slowdown have been discussed. In this article by looking at the financial and banking sector performance of the country during 2001 local and 2008 global crisis, I tried to compare two mainstream strands of theory, i.e. liberal and Keynesian approaches to the economic crisis. It seems like the country has experienced a neo-liberal, unregulated financial episode until 2001 crisis, while in post-2001 period we have witnessed more regulatory and Keynesian financial remedies which were successful to save the country from more harmful effects of the Great Recession. Those Keynesian style regulations were mainly inspired from the effects of changes within the governing style of international financial institutions. But in the final section of the analysis, through pointing out the potential triggers for another economic crisis, this article argues that though Keynesian solutions are more logical and helpful in alleviating the symptoms of crisis, they could not make Turkey crisis-free. High current account deficits, persistent inflation, adamant unemployment and insufficient domestic production in the face of rising imports, all of these can be classified as the symptoms of the still crisis prone economic structure in the country. Then, other, more radical alternatives should be on the agenda for a better future.

References

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  • Balkan, N. and Savran, S. ed., (2002). The Ravages of Neo-liberalism: Economy, Society, and Gender in Turkey. New York: Nova Publishers.
  • Bankacılık Düzenleme ve Denetleme Kurulu (2009). Krizden İstikrara Türkiye Tecrübesi. [online] Ankara: BDDK Döküman Merkezi.
  • Available at: http://www.bddk.org.tr/websitesi/turkce/raporlar/calisma_raporlari/7378krizden%20 %C4%B0stikrara%20t%C3%BCrkiye%20tecr%C3%BCbesi.pdf
  • Bedirhanoğlu, P. (2015), “Corruption and State under the AKP Rule in Turkey: Retreat from the Modern Bourgeois State?” Centre for Policy Analysis and Research on Turkey, 4 (5) pp.35-44. Available at: http://researchturkey.org/?p=8817
  • Boratav, K. (1988). Türkiye İktisat Tarihi, 1908-1985 (Vol. 1). İstanbul: Gerçek Yayınevi.
  • Colombo, J. (2014). Why the Worst Is Still Ahead for Turkey’s Bubble Economy. [online] Forbes. Available at: https://www.forbes.com/sites/jessecolombo/2014/03/05/why-the-worst-is-still-ahead-forturkeys- bubble-economy/#79e924794145 [Accessed 15 May 2015].
  • Brunnermeier, M. & Pedersen, H. (2009). “Market liquidity and funding liquidity”. Review of Financial Studies, 22(6), 2201-2238.
  • Buğra, A. (2015). Prof. Dr. Ayşe Buğra: Türkiye’de bugün din, ekonomik modelin ilişki sermayesi. [online] T24. Available at: http://t24.com.tr/haber/prof-dr-ayse-bugra-turkiyede-bugun-din-ekonomik-modelin-iliskisermayesi, 287342 [Accessed 15 May 2015].
  • Erkens, D., Hung, M. & Matos, P. (2012). “Corporate governance in the 2007–2008 financial crisis: Evidence from financial institutions worldwide”. Journal of Corporate Finance, 18(2), 389-411.
  • Friedman, J. (2009). “A crisis of politics, not economics: complexity, ignorance, and policy failure”. Critical Review, 21(2-3), 127-183.
  • Güloğlu, B. & Altunoğlu, E. (2002). “Finansal Serbestleşme Politikaları ve Finansal Krizler: Latin Amerika, Meksika, Asya ve Türkiye Krizleri”. İstanbul Üniversitesi Siyasal Bilgiler Fakültesi Dergisi, 27, 111- 140.
  • Ivashina, V. & Scharfstein, D. (2010). “Bank lending during the financial crisis of 2008”. Journal of Financial Economics, 97(3), 319-338.
  • Keynes, J.M. (1925). “Am I a Liberal”, The Collected Writings of John Maynard Keynes, Vol 9. London: St Martin’s Press.
  • Keynes, J.M. (1963). Essays in Persuasion. London: WW Norton &Company
  • Keynes, J. M. (2006). General theory of employment, interest and money. New Delhi: Atlantic Publishers & Dist.
  • Kibritçioğlu, A. (2007). Türkiye’deki Hükümetlerin Makroekonomik Performanslarının Bir Karşılaştırması, 1987-2007. MPRA Paper No: 3962. [online] Munich Personal RePEc Archive. Available at: https://mpra.ub.uni-muenchen.de/3962/1/MPRA_paper_3962.pdf [Accessed 15 May 2015].
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  • Lang, W. & Jagtiani, J. (2010). “The mortgage and financial crises: The role of credit risk management and corporate governance”. Atlantic Economic Journal, 38(3), 295-316.
  • OECD (2014). World Outlook Report. Available at: http://www.oecd.org/eco/outlook/economicoutlook.htm [Accessed 15 May 2015].
  • Öniş, Z. (2003). “Domestic Politics versus Global Dynamics: Towards a Political Economy of the 2000 and 2001 Financial Crises in Turkey”. Turkish Studies, 4(2), 1-30.
  • Öniş, Z. (2009). “Beyond the 2001 financial crisis: The political economy of the new phase of neo-liberal restructuring in Turkey”. Review of International Political Economy, 16(3), 409-432.
  • Rodrik, D. (2017). Turkish economic myths. [Blog] Dani Rodrik’s weblog: Unconventional thoughts on economic development and globalization. Available at: http://rodrik.typepad.com/dani_rodriks_weblog/2015/04/turkish-economic-myths.html [Accessed 15 May 2015].
  • Polanyi, K. (1944). The Great Transformation: the political and economic origins of our time, Boston: Beacon Press.
  • Şenses, F. & Taymaz, E. (2003). “Unutulan bir toplumsal amaç: Sanayileşme ne oluyor? Ne olmalı? In Köse A., Şenses F. and Yeldan E. (eds.), İktisadi Kalkınma Kriz ve İstikrar, İstanbul: İletişim.
  • Seyidoğlu, H. (2003). “Uluslararası mali krizler, IMF politikaları, az gelişmiş ülkeler, Türkiye ve dönüşüm ekonomileri”. Doğuş Üniversitesi Dergisi, 4 (2) Available at: http://openaccess.dogus.edu.tr:8080/xmlui/handle/11376/537 [Accessed 15 May 2015].
  • Skidelsky R. (1992) John Maynard Keynes: Volume 2: The Economist as a Saviour, 1920-1937. New York: Penguin.
  • Sönmez, M. (2013). Gerçek işsizlik yüzde 20, işsizler 6 milyon!…. [Blog]Mustafa Sönmez. Available at: http://mustafasonmez.net/?p=3879 [Accessed 15 May 2015].
  • Stiglitz, J. (2000). The Insider. [online] New Republic. Available at: https://newrepublic.com/article/61082/the-insider [Accessed 15 May 2015]. Stiglitz, J. (2009). The financial crisis of 2007-2008 and its macroeconomic consequences. [PDF] Available at: http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan033508.pdf [Accessed 15 May 2015].
  • Stiglitz, J. (2012). The Price of Inequality: How Today’s Divided Society Endangers Our Future. London: Penguin UK.
  • Stockhammer, E. (2013). “Rising inequality as a cause of the present crisis”. Cambridge Journal of Economics, 39 (3), 935-958.
  • Taylor, J. B. (2009). Economic policy and the financial crisis: an empirical analysis of what went wrong. Critical Review, 21(2-3), 341-364.
  • Trading Economics. (2014). Turkey Current Account to GDP. [online] Available at: https://tradingeconomics. com/turkey/current-account-to-gdp [Accessed 15 May 2015].
  • Uras, G. (2014). Satılan her 100 otoda yerlinin payı 33’ten 25’e düştü... Milliyet. [online] Available at: http://www.milliyet.com.tr/satilan-her-100-otoda-yerlinin/ekonomi/ydetay/1849141/default. htm [Accessed 15 May 2015].
  • Yeldan, E. (2001). On the IMF-Directed Disinflation Program in Turkey: A Program for Stabilization and Austerity or a Recipe for Impoverishment and Financial Chaos? Available at: http://www. networkideas.org/featart/dec2001/Erinc_Yeldan.pdf [Accessed 15 May 2015].
Year 2017, Volume: 5 Issue: 2, 245 - 262, 27.10.2017
https://doi.org/10.14782/sbd.2017.74

Abstract

References

  • Acharya, V. & Richardson, M. (2009). “Causes of the financial crisis”. Critical Review, 21(2-3), 195-210. Akyüz, Y. & Boratav, K. (2003). “The making of the Turkish financial crisis”. World Development, 31(9), 1549-1566.
  • Balkan, N. and Savran, S. ed., (2002). The Ravages of Neo-liberalism: Economy, Society, and Gender in Turkey. New York: Nova Publishers.
  • Bankacılık Düzenleme ve Denetleme Kurulu (2009). Krizden İstikrara Türkiye Tecrübesi. [online] Ankara: BDDK Döküman Merkezi.
  • Available at: http://www.bddk.org.tr/websitesi/turkce/raporlar/calisma_raporlari/7378krizden%20 %C4%B0stikrara%20t%C3%BCrkiye%20tecr%C3%BCbesi.pdf
  • Bedirhanoğlu, P. (2015), “Corruption and State under the AKP Rule in Turkey: Retreat from the Modern Bourgeois State?” Centre for Policy Analysis and Research on Turkey, 4 (5) pp.35-44. Available at: http://researchturkey.org/?p=8817
  • Boratav, K. (1988). Türkiye İktisat Tarihi, 1908-1985 (Vol. 1). İstanbul: Gerçek Yayınevi.
  • Colombo, J. (2014). Why the Worst Is Still Ahead for Turkey’s Bubble Economy. [online] Forbes. Available at: https://www.forbes.com/sites/jessecolombo/2014/03/05/why-the-worst-is-still-ahead-forturkeys- bubble-economy/#79e924794145 [Accessed 15 May 2015].
  • Brunnermeier, M. & Pedersen, H. (2009). “Market liquidity and funding liquidity”. Review of Financial Studies, 22(6), 2201-2238.
  • Buğra, A. (2015). Prof. Dr. Ayşe Buğra: Türkiye’de bugün din, ekonomik modelin ilişki sermayesi. [online] T24. Available at: http://t24.com.tr/haber/prof-dr-ayse-bugra-turkiyede-bugun-din-ekonomik-modelin-iliskisermayesi, 287342 [Accessed 15 May 2015].
  • Erkens, D., Hung, M. & Matos, P. (2012). “Corporate governance in the 2007–2008 financial crisis: Evidence from financial institutions worldwide”. Journal of Corporate Finance, 18(2), 389-411.
  • Friedman, J. (2009). “A crisis of politics, not economics: complexity, ignorance, and policy failure”. Critical Review, 21(2-3), 127-183.
  • Güloğlu, B. & Altunoğlu, E. (2002). “Finansal Serbestleşme Politikaları ve Finansal Krizler: Latin Amerika, Meksika, Asya ve Türkiye Krizleri”. İstanbul Üniversitesi Siyasal Bilgiler Fakültesi Dergisi, 27, 111- 140.
  • Ivashina, V. & Scharfstein, D. (2010). “Bank lending during the financial crisis of 2008”. Journal of Financial Economics, 97(3), 319-338.
  • Keynes, J.M. (1925). “Am I a Liberal”, The Collected Writings of John Maynard Keynes, Vol 9. London: St Martin’s Press.
  • Keynes, J.M. (1963). Essays in Persuasion. London: WW Norton &Company
  • Keynes, J. M. (2006). General theory of employment, interest and money. New Delhi: Atlantic Publishers & Dist.
  • Kibritçioğlu, A. (2007). Türkiye’deki Hükümetlerin Makroekonomik Performanslarının Bir Karşılaştırması, 1987-2007. MPRA Paper No: 3962. [online] Munich Personal RePEc Archive. Available at: https://mpra.ub.uni-muenchen.de/3962/1/MPRA_paper_3962.pdf [Accessed 15 May 2015].
  • Krugman, P. (2009). Revenge of the Glut. [online] New York Times.
  • Available at: http://www.nytimes.com/2009/03/02/opinion/02krugman.html [Accessed 15 May 2015].
  • Lang, W. & Jagtiani, J. (2010). “The mortgage and financial crises: The role of credit risk management and corporate governance”. Atlantic Economic Journal, 38(3), 295-316.
  • OECD (2014). World Outlook Report. Available at: http://www.oecd.org/eco/outlook/economicoutlook.htm [Accessed 15 May 2015].
  • Öniş, Z. (2003). “Domestic Politics versus Global Dynamics: Towards a Political Economy of the 2000 and 2001 Financial Crises in Turkey”. Turkish Studies, 4(2), 1-30.
  • Öniş, Z. (2009). “Beyond the 2001 financial crisis: The political economy of the new phase of neo-liberal restructuring in Turkey”. Review of International Political Economy, 16(3), 409-432.
  • Rodrik, D. (2017). Turkish economic myths. [Blog] Dani Rodrik’s weblog: Unconventional thoughts on economic development and globalization. Available at: http://rodrik.typepad.com/dani_rodriks_weblog/2015/04/turkish-economic-myths.html [Accessed 15 May 2015].
  • Polanyi, K. (1944). The Great Transformation: the political and economic origins of our time, Boston: Beacon Press.
  • Şenses, F. & Taymaz, E. (2003). “Unutulan bir toplumsal amaç: Sanayileşme ne oluyor? Ne olmalı? In Köse A., Şenses F. and Yeldan E. (eds.), İktisadi Kalkınma Kriz ve İstikrar, İstanbul: İletişim.
  • Seyidoğlu, H. (2003). “Uluslararası mali krizler, IMF politikaları, az gelişmiş ülkeler, Türkiye ve dönüşüm ekonomileri”. Doğuş Üniversitesi Dergisi, 4 (2) Available at: http://openaccess.dogus.edu.tr:8080/xmlui/handle/11376/537 [Accessed 15 May 2015].
  • Skidelsky R. (1992) John Maynard Keynes: Volume 2: The Economist as a Saviour, 1920-1937. New York: Penguin.
  • Sönmez, M. (2013). Gerçek işsizlik yüzde 20, işsizler 6 milyon!…. [Blog]Mustafa Sönmez. Available at: http://mustafasonmez.net/?p=3879 [Accessed 15 May 2015].
  • Stiglitz, J. (2000). The Insider. [online] New Republic. Available at: https://newrepublic.com/article/61082/the-insider [Accessed 15 May 2015]. Stiglitz, J. (2009). The financial crisis of 2007-2008 and its macroeconomic consequences. [PDF] Available at: http://unpan1.un.org/intradoc/groups/public/documents/apcity/unpan033508.pdf [Accessed 15 May 2015].
  • Stiglitz, J. (2012). The Price of Inequality: How Today’s Divided Society Endangers Our Future. London: Penguin UK.
  • Stockhammer, E. (2013). “Rising inequality as a cause of the present crisis”. Cambridge Journal of Economics, 39 (3), 935-958.
  • Taylor, J. B. (2009). Economic policy and the financial crisis: an empirical analysis of what went wrong. Critical Review, 21(2-3), 341-364.
  • Trading Economics. (2014). Turkey Current Account to GDP. [online] Available at: https://tradingeconomics. com/turkey/current-account-to-gdp [Accessed 15 May 2015].
  • Uras, G. (2014). Satılan her 100 otoda yerlinin payı 33’ten 25’e düştü... Milliyet. [online] Available at: http://www.milliyet.com.tr/satilan-her-100-otoda-yerlinin/ekonomi/ydetay/1849141/default. htm [Accessed 15 May 2015].
  • Yeldan, E. (2001). On the IMF-Directed Disinflation Program in Turkey: A Program for Stabilization and Austerity or a Recipe for Impoverishment and Financial Chaos? Available at: http://www. networkideas.org/featart/dec2001/Erinc_Yeldan.pdf [Accessed 15 May 2015].
There are 36 citations in total.

Details

Subjects Political Science
Journal Section Makaleler
Authors

Özgür Üşenmez

Publication Date October 27, 2017
Published in Issue Year 2017 Volume: 5 Issue: 2

Cite

APA Üşenmez, Ö. (2017). Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation. Marmara Üniversitesi Siyasal Bilimler Dergisi, 5(2), 245-262. https://doi.org/10.14782/sbd.2017.74
AMA Üşenmez Ö. Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation. Marmara Üniversitesi Siyasal Bilimler Dergisi. October 2017;5(2):245-262. doi:10.14782/sbd.2017.74
Chicago Üşenmez, Özgür. “Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation”. Marmara Üniversitesi Siyasal Bilimler Dergisi 5, no. 2 (October 2017): 245-62. https://doi.org/10.14782/sbd.2017.74.
EndNote Üşenmez Ö (October 1, 2017) Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation. Marmara Üniversitesi Siyasal Bilimler Dergisi 5 2 245–262.
IEEE Ö. Üşenmez, “Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation”, Marmara Üniversitesi Siyasal Bilimler Dergisi, vol. 5, no. 2, pp. 245–262, 2017, doi: 10.14782/sbd.2017.74.
ISNAD Üşenmez, Özgür. “Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation”. Marmara Üniversitesi Siyasal Bilimler Dergisi 5/2 (October 2017), 245-262. https://doi.org/10.14782/sbd.2017.74.
JAMA Üşenmez Ö. Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation. Marmara Üniversitesi Siyasal Bilimler Dergisi. 2017;5:245–262.
MLA Üşenmez, Özgür. “Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation”. Marmara Üniversitesi Siyasal Bilimler Dergisi, vol. 5, no. 2, 2017, pp. 245-62, doi:10.14782/sbd.2017.74.
Vancouver Üşenmez Ö. Turkey: In the Midst of Crisis, Between Liberal Utopia and Keynesian Regulation. Marmara Üniversitesi Siyasal Bilimler Dergisi. 2017;5(2):245-62.

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