On Structural Sources of the 1994 Turkish Crisis: a CGE modelling analysis

This article focuses on the political economy of Turkey in the 1990s to illustrate the importance of analysing economic variables that intersect with the quality of political democracy. In 1989, the debt-ridden state moved to systematically and completely deregulate Turkey's financial markets. Together with the ongoing processes of liberalizing commodity markets and integrating with global capital markets, financial liberalization was expected to achieve fiscal and monetary stability, stimulate business confidence to invest in productive sectors, produce stable growth, encourage privatization and control inflation. However, the new hegemony of the capital markets has gone handin-hand with deteriorating macroeconomic performance, a worsening income distribution, the discrediting of politics and its isolation from society. The authors examine several key dynamics which are helping to legitimate the neoliberal agenda of the 1990s. These include the distribution of state largesse to manipulate electoral capitalism; the rise of an informal sector in thè Anatolian Tigers'; promotion of the seductive attractions of the market; and an antipolitical reform populism adopted by political actors to exploit popular disillusionment with the political system.

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“…See Yeldan (1998) for a more formal account of the deterioration of the fiscal balances of the Turkish public sector in the 1990s. 11.…”

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confidence: 99%

Politics, Society and Financial Liberalization: Turkey in the 1990s

Cizre‐Sakallioğlu

Yeldan

2000

Development and Change

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“…In¯ation in Turkey has resulted in resource misallocation and distorted the ef®cient play of market forces in the economy and retarted the growth of private investment. Indeed, it is true that some private investment was reduced because numerous business ®rms have beeǹ crowded-out' of the ®nancial markets by government spending (Yentu Èrk, 1999;Yeldan, 1998). Morever, rapid and variable in¯ation has imposed serious costs on the community putting at risk both employment and living standards.…”

Section: Economic Environment and Limited Size Of The Capital Marketmentioning

confidence: 97%

Privatization in Turkey: Implementation, politics of privatization and performance results

Karatas

2001

J of Intl Development

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The paper provides a comprehensive survey of privatization transastions in Turkey which took place between 1986 and 2000. The objectives of the privatization programme and privatized and nominated SOEs are discussed. The breakdown of total proceeds by sales methods and scope of the privatization programme by economic sectors are examined. The saleability of relatively large public enterprises is reviewed and utilization of privatization proceeds during and after privatization process is critically appraised. In addition, an attempt is made to discuss the politics of privatization by referring to key political and economic factors which have influenced implementation of the privatization programme. Following a short review of the economic environment and macroeconomic indicators in Turkey, focus is also placed on the research results that are available on the performance of public, private and privatized SOEs, particularly in the cement sector. In the final section, some key issues relevant to Turkish privatization are accentuated and some conclusion are drawn. © 2001 John Wiley & Sons, Ltd.

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“…So the year 1990 stands as the best candidate to serve as the initial year in fitting the steady-state version of the model. Thus, in this step, we use the database set out and discussed in detail in Köse and Yeldan (1996) and Yeldan (1998), and calibrate the 'structural' parameters of the model. With the calibrated parameters, the model has to generate the data of the initial year 1990, as a solution for a point in the equilibrium path of the economy.…”

Section: Main Traits Of the Turkish Economy In The 1990smentioning

confidence: 99%

IMF Programmes, Fiscal Policy and Growth: Investigation of Macroeconomic Alternatives in an OLG Model of Growth for Turkey

Voyvoda

Yeldan

2005

Comp Econ Stud

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In this paper, we investigate the fiscal policy alternatives on domestic debt management and public expenditures on education, cohort welfare, and growth for the Turkish economy. We utilise a growth model in the overlapping generations (OLG) tradition with intertemporally optimising agents and open capital markets, calibrated to the Turkish economy in 1990s. We examine the macroeconomic effects of the current IMF-led austerity programme driven by the objective of attaining primary fiscal surpluses and illustrate the ruinous effects of constrained human capital investments due to insufficient funds to public education, and constrained real production activities due to the current mode of financing of domestic debt. We then examine various taxation alternatives to mitigate the reductions in the availability of public funds to reproducible factors of production. Our results suggest that the current fiscal programme based on the primary surplus objective suffers from serious trade-offs on growth and fiscal targets, and that an alternative public expenditures programme with the objective of reviving public funds for education and for social infrastructure is likely to produce superior economic performance. Comparative Economic Studies (2005) 47, 41-79.

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On Structural Sources of the 1994 Turkish Crisis: a CGE modelling analysis

Cited by 22 publications

References 7 publications

Politics, Society and Financial Liberalization: Turkey in the 1990s

Politics, Society and Financial Liberalization: Turkey in the 1990s

Privatization in Turkey: Implementation, politics of privatization and performance results

IMF Programmes, Fiscal Policy and Growth: Investigation of Macroeconomic Alternatives in an OLG Model of Growth for Turkey

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