An Assessment of the Turkish Economy in the AKP Era
Author
Yeldan, E. A.
Ünüvar, B.
Date
2016Source Title
Research and Policy on Turkey
Print ISSN
2376-0818
Electronic ISSN
2376-0826
Publisher
Routledge
Volume
1
Issue
1
Pages
11 - 28
Language
English
Type
ArticleItem Usage Stats
450
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views
264
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Abstract
This paper studies the performance of the Turkish economy under the reign of the
Justice and Development Party (Adalet ve Kalkınma Partisi, AKP). Most of this
period coincides with abundant global capital especially in the aftermath of the Great
Recession. We argue that AKP’s economy policies were shaped with the goal of
attracting foreign capital to the country, creating a debt ridden speculative growth
model and turning a blind eye to the mandate of solving the country’s fundamental
problems. Within this model, monetary policy has been the leading actor. Although
the Central Bank has been operating with a price stability mandate during this period, inflation targeting performance has been poor, creating doubts about the leading
motive behind the reaction function. Fiscal policy became a dependent variable,
shadowed by the capital chasing monetary policy. As global liquidity started to
become more risk averse in the post-tapering era and as accumulated domestic
problems of the country became thicker, Turkey’s growth model proved to be
unsustainable, intensifying external fragility for the period ahead.