The Global South after the Crisis

The Global South after the Crisis

Growth, Inequality and Development in the Aftermath of the Great Recession

Edited by Hasan Cömert and Rex A. McKenzie

This volume is split into two accessible sections. The first part concentrates on the impact of the crisis on growth, inequality, policy responses and policy shifts in key areas such as central banking. The second part comprises individual country case studies and includes an exploration of the vulnerabilities related to the integration of developing economies into the world economy. The effect of the crisis on trade, and the ways in which some developing countries have entered into a prolonged period of stagnant growth following the global crisis are all considered.

Chapter 8: The impacts of the global crisis on the Turkish economy, and policy responses

Hasan Cömert and Mehmet Selman Çolak

Subjects: economics and finance, development economics, post-keynesian economics


This chapter focuses on the impacts of the recent global crisis on the Turkish economy and the policy measures taken in response to the crisis. The Turkish economy was adversely affected by the crisis through three main channels, namely expectations, trade and finance. The distinctive characteristic of the crisis was a severe export shock, which can account for an important part of the decline in production in Turkey. Besides this, a sudden stop in financial flows worsened the credit conditions in the economy. As a result, the Turkish economy witnessed one of its worst economic downturns after the Second World War. In fact, the Turkish growth performance was one of the worst among developing countries. However, unlike previous crises, the financial markets in Turkey and many other developing countries did not experience a collapse. We argue that this is mainly related to the small magnitude and short duration of the financial shocks hitting Turkey and other developing countries relative to the ones in previous decades. In this sense, the Turkish economy might not have been fully tested during the last global crisis. How the economy will behave in case of a larger financial shock is still unknown.

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