EconPapers    
Economics at your fingertips  
 

The Re‐making of the Turkish Crisis

Ozgur Orhangazi () and Erinc Yeldan ()

Development and Change, 2021, vol. 52, issue 3, 460-503

Abstract: 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, debt‐led 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.

Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.1111/dech.12644

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:devchg:v:52:y:2021:i:3:p:460-503

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0012-155X

Access Statistics for this article

More articles in Development and Change from International Institute of Social Studies
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2022-09-29
Handle: RePEc:bla:devchg:v:52:y:2021:i:3:p:460-503