Foreign Capital Investment and Economic Crises in Turkey

Mustafa Öztürk and Osman Nuri Aras

MPRA Paper from University Library of Munich, Germany

Abstract: 1970’s financial liberalization has been followed by the liberalization of commercial markets in the process of globalization. Liberalization of financial markets has caused the acceleration of capital flows and the increase of their volume. Capital that flows to developing countries suffering from saving gaps has positive effects on the economies when they entered into these countries and lead to destabilizations on their economies when they went out. The influences of capital flows, especially the ones of speculative capital, have been observed in the financial crises erupted in international level since the 1990s. By performing the financial liberalization, Turkey has tried to resolve the capital gap problem with the entrance of foreign capital since 1989. Unfortunately, by increasing its vulnerabilities, liberalization caused Turkish economy, which has macroeconomic weaknesses; to become open to destabilizing effects of capital flows and global financial crises. The aim of this study is to determine the effects of capital flows on Turkish Economy.

Keywords: International Investment; Long-Term Capital Movements; Short-Term Capital Movements; Financial Crisis (search for similar items in EconPapers)
JEL-codes: F21 F3 G0 G01 G1 G11 G15 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published in International Journal of Social Sciencesand Humanity Studies 3.1(2011): pp. 323-335

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