[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/erg/wpaper/520.html
   My bibliography  Save this paper

Vulnerability to External Financial Shocks: The Case of Turkey

Author

Listed:
  • Hasan Ersel

    (Sabanci University, Istanbul, Turkey)

Abstract
For many observers, Turkey’s performance during the “2007+ global financial crisis” was puzzling. In the first half of the 2009, Turkey was one of the worst affected countries in the world. In addition, the Turkish government was too slow to react, and the measures taken seemed inadequate. The purpose of this paper is to answer the following two questions: First, why was Turkey affected so much by the crisis? And second, why was the government’s reaction late and “less than adequate”? The paper is organized as follows: In the following section the concept of vulnerability is briefly discussed. The second section is devoted to another methodological issue. Here a simple framework is introduced to analyze the channels and the manner in which a shock such as the 2007+ crisis affects an economy. In the third section, Turkey’s experience with the 2001 crisis is discussed. The purpose of this section is to give some historical insight to explain why the government was confident (even over-confident) of Turkey’s resiliency. The fourth section briefly surveys the developments in the Turkish economy after it was hit by the global crisis in the last quarter of 2008. In the fifth section, in the light of these discussions, the government’s reaction is analyzed. In this section the emphasis is on the uncertainty that the 2007+ crisis had created. Therefore it is assumed that the government was taking decisions under complete uncertainty. A simple framework is introduced to show that a rationale can be attributed to the government’s behavior. The paper concludes with the evaluation of the government’s decisions.

Suggested Citation

  • Hasan Ersel, 2010. "Vulnerability to External Financial Shocks: The Case of Turkey," Working Papers 520, Economic Research Forum, revised 05 Jan 2010.
    • Handle: RePEc:erg:wpaper:520
    as

    Download full text from publisher

    File URL: http://erf.org.eg/wp-content/uploads/2014/08/520.pdf
    Download Restriction: no
    File URL: http://bit.ly/2nduOxb
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bussiere, Matthieu & Mulder, Christian, 2000. "Political Instability and Economic Vulnerability," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 5(4), pages 309-330, October.
    2. Sübidey Togan & Hasan Ersel, 2007. "Current Account Sustainability: The Case of Turkey," Chapters, in: Erdem Başçı & Sübidey Togan & Jürgen von Hagen (ed.), Macroeconomic Policies for EU Accession, chapter 9, Edward Elgar Publishing.
    3. Bernanke, Ben & Gertler, Mark, 1989. "Agency Costs, Net Worth, and Business Fluctuations," American Economic Review, American Economic Association, vol. 79(1), pages 14-31, March.
    4. Patrick Guillaumont, 2009. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Oxford Development Studies, Taylor & Francis Journals, vol. 37(3), pages 193-228.
    5. Patrick Guillaumont, 2008. "An Economic Vulnerability Index: Its Design and Use for International Development Policy," Post-Print hal-00364455, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:wsr:wpaper:y:2015:i:145 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oasis Kodila-Tedika & Simplice A. Asongu & Julio Mukendi Kayembe, 2016. "Middle Class in Africa: Determinants and Consequences," International Economic Journal, Taylor & Francis Journals, vol. 30(4), pages 527-549, October.
    2. Lars Osberg & Andrew Sharpe, 2014. "Measuring Economic Insecurity in Rich and Poor Nations," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(S1), pages 53-76, May.
    3. Joël CARIOLLE, 2011. "L’Indice de vulnérabilité économique rétrospectif - Mise à jour 2010," Working Papers I09, FERDI.
    4. United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West (ed.), 2012. "Regional Cooperation for Inclusive and Sustainable Development: South and South-West Asia Development Report 2012-2013," SSWA Books and Research Reports, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) South and South-West Asia Office, number brr4, May.
    5. S. Balica & N. Wright & F. Meulen, 2012. "A flood vulnerability index for coastal cities and its use in assessing climate change impacts," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 64(1), pages 73-105, October.
    6. Blancard, Stéphane & Hoarau, Jean-François, 2013. "A new sustainable human development indicator for small island developing states: A reappraisal from data envelopment analysis," Economic Modelling, Elsevier, vol. 30(C), pages 623-635.
    7. Brunori, Paolo & O'Reilly, Marie, 2010. "Social protection for development: a review of definitions," MPRA Paper 29495, University Library of Munich, Germany.
    8. Patrick GUILLAUMONT & Sylviane GUILLAUMONT JEANNENEY, 2009. "State fragility and economic vulnerability: What is measured and why?," Working Papers P07, FERDI.
    9. Joël CARIOLLE, 2011. "The Economic Vulnerability Index - 2010 Update," Working Papers I09, FERDI.
    10. Joël CARIOLLE & Michaël GOUJON, 2013. "A retrospective economic vulnerability index, 1990-2011 - Using the 2012 UN-CDP definitions," Working Papers I17, FERDI.
    11. Alisa Dicaprio & Silke Trommer, 2010. "Bilateral Graduation: The Impact of EPAs on LDC Trade Space," Journal of Development Studies, Taylor & Francis Journals, vol. 46(9), pages 1607-1627.
    12. Sosso FEINDOUNO & Michaël GOUJON, 2016. "The retrospective economic vulnerability index, 2015 update," Working Papers P147, FERDI.
    13. Ambra Altimari & Simona Balzano & Gennaro Zezza, 2018. "Measuring economic vulnerability: a Structural Equation Modeling approach," Working Papers 2018-01, Universita' di Cassino, Dipartimento di Economia e Giurisprudenza.
    14. Song, Wei-Ling & Uzmanoglu, Cihan, 2016. "TARP announcement, bank health, and borrowers’ credit risk," Journal of Financial Stability, Elsevier, vol. 22(C), pages 22-32.
    15. Janvier D. Nkurunziza, 2005. "Reputation and Credit without Collateral in Africa`s Formal Banking," Economics Series Working Papers WPS/2005-02, University of Oxford, Department of Economics.
    16. Manuela Goretti, 2005. "The Brazilian currency turmoil of 2002: a nonlinear analysis," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 10(4), pages 289-306.
    17. Athanasios Geromichalos & Lucas Herrenbrueck, 2022. "The Liquidity-Augmented Model of Macroeconomic Aggregates: A New Monetarist DSGE Approach," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 45, pages 134-167, July.
    18. Frankel, Jeffrey & Saravelos, George, 2012. "Can leading indicators assess country vulnerability? Evidence from the 2008–09 global financial crisis," Journal of International Economics, Elsevier, vol. 87(2), pages 216-231.
    19. Daisuke Ikeda & Toan Phan & Timothy Sablik, 2020. "Asset Bubbles and Global Imbalances," Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, vol. 20, pages 1-4, January.
    20. Guillaumont, Patrick & Guillaumont Jeanneney, Sylviane & Wagner, Laurent, 2017. "How to Take into Account Vulnerability in Aid Allocation Criteria and Lack of Human Capital as Well: Improving the Performance Based Allocation," World Development, Elsevier, vol. 90(C), pages 27-40.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:erg:wpaper:520. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sherine Ghoneim (email available below). General contact details of provider: https://edirc.repec.org/data/erfaceg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.