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

Authors : Özgür Üşenmez

Pages : 245-262

Doi:10.14782/sbd.2017.74

View : 18 | Download : 12

Publication Date : 2017-10-27

Article Type : Research Paper

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.
Keywords : Keynesian, Neo Liberal, Turkey, Crisis