Capital Flows and Credit Expansions in Turkey

Orhangazi, Özgür

doi:10.1177/0486613414537993

Cited by 17 publications

(14 citation statements)

References 9 publications

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“…Thereon, Turkey attracted an unprecedented capital inflow that amounted to US$400 billion between 2003 and 2012 as opposed to only US$35 billion between 1980 and 2002 (Orhangazi, 2014: 4). Furthermore, the US$122 billion of the total inflows was in the form of foreign direct investment and the financial sector held the top place by attracting US$38.6 billion of direct investments (Ministry of Economy, 2013: 11).…”

Section: Case Study: Turkeymentioning

confidence: 99%

Financialisation of pensions: The case of Turkey

Saritas

2019

Global Social Policy

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This study contributes to the literature on pension reforms by evaluating the Turkish case within a theoretical framework drawing on financialisation as extensive and intensive accumulation of finance assets. Financialisation refers to the expansion of finance into ever more areas of economic and social life while increasing its depth through more sophisticated financial operations. The Turkish pension reform, which has been run under the influence of global policy actors, illustrates the integration of finance with social policy. The intensification of dependence upon finance is demonstrated by the Turkish pension funds that stimulate innovation of financial instruments through demand-side impacts on capital markets. The critical analysis of financialised pensions reveals that the social policy advice of international financial institutions, with motives to extend financial markets, exacerbates class and gender inequalities. JEL Classification: G230 Pension funds; J140 Ageing, Pension; N2 Financialisation

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Section: Case Study: Turkeymentioning

confidence: 99%

Financialisation of pensions: The case of Turkey

Saritas

2019

Global Social Policy

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“…Second, a significant portion of the capital flows went directly into the banking sector to be converted into domestic credit. These processes are not specific to Turkey; capital flows to 'emerging markets' led to credit and asset bubbles as domestic banks borrowed from abroad to fund domestic lending (Akyüz, 2012(Akyüz, , 2014Orhangazi, 2014;Orhangazi and Özgür, 2015). Furthermore, expansion of credit contributed to the widening of the current account deficit through its expansionary impact on demand by increasing imports of consumption goods as well as intermediate and capital goods, exacerbating the import dependence of domestic production.…”

Section: Domestic Credit Boommentioning

confidence: 99%

The Re‐making of the Turkish Crisis

Orhangazi¹,

Yeldan²

2021

Development and Change

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By the end of 2018 Turkey had entered a new economic crisis and a lengthy recession period. In contrast to the previous financial crises of 1994, 2001 and 2009, when the economy shrank abruptly with a spectacular collapse of asset values and a severe contraction of output, the 2018 economic crisis was characterized by a prolonged recession with persistent low (negative) rates of growth, dwindling investment performance, debt repayment problems, secularly rising unemployment, spiralling currency depreciation and high inflation. The mainstream approach attributes this dismal performance to a lack of 'structural reforms' and/or exogenous policy factors. However, this analysis shows that the underlying sources of the crisis are to be found not in the conjunctural cycles of reform fatigue, but rather in the post-2001, neoliberal, speculation-led growth model that relied excessively on hot-money inflows and external debt accumulation. This article argues that following the post-2001 orthodox reforms, a foreign capital inflow-dependent, debtled and construction-centred economic growth model dominated the economy and caused a long build-up of imbalances and increased fragilities that led to the 2018 crisis. The Covid-19 pandemic of 2020-21 further exposed these fragilities, pushing the economy back into a recession with rapid capital outflows causing another round of sharp currency depreciation. 2. 'Justice and Development Party' is the English translation of Turkey's Adalet ve Kalkınma Partisi (AKP), founded in 2001 and in power continuously since the end of 2002. For historical reviews of the rise of the AKP see, for example, Esen and Gümüşçü (2016); Yeldan and Ünüvar (2016); Yılmaz and Bashirov (2018). 3. This model has variously been characterized as dependent financialization (Akçay and Güngen, 2019), deficit-led neoliberal populism (Güven, 2016), or a mix of neoliberal developmentalism and authoritarian populism (Adaman et al., 2019).

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“…Orhangazi explored the relation between capital inflows and credit expansion by using logit model. According to the findings, net private capital flows effect positively credit expansion by controlling other determinants [4]. Kara et al made a cross-country comparison of credit growth by calculating a ratio of net credit use with respect to national income.…”

Section: Literature On Credit Expansionmentioning

confidence: 99%

More Credits, Less Cash: A Panel Cointegration Approach

Dal¹

2021

Linear and Non-Linear Financial Econometrics -Theory and Practice

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In this study, the long-run relation among credit expansion and liquidity risk was analyzed by using data of 20 banks in Turkish banking sector for the period 2014.Q1-2017.Q4. In the analysis, dynamic panel cointegration methodology which depends on cross-sectional dependence and homogeneity was adopted in order to determine whether there is a long-run relation between variables. As a result of the cointegration analysis, a long-run relation was found between liquidity risk and credit expansion. Also, the result indicates that credit expansion positively affects liquidity risk. This result suggests that the banks may constrain their credit growth in the long term in order to decrease liquidity risk.

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Capital Flows and Credit Expansions in Turkey

Cited by 17 publications

References 9 publications

Financialisation of pensions: The case of Turkey

Financialisation of pensions: The case of Turkey

The Re‐making of the Turkish Crisis

More Credits, Less Cash: A Panel Cointegration Approach

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