Macroeconomic Policies for EU Accession
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Macroeconomic Policies for EU Accession

Edited by Erdem Başçı, Sübidey Togan and Jürgen von Hagen

What macroeconomic requirements must Turkey meet in its quest to accede to the European Union? This book, with its distinguished contributors – well-known economists and policymakers – examines and analyses these macroeconomic challenges confronting Turkey. Although the focus is on the specific situation of Turkey, the lessons are informative for other candidate countries and the findings directly relevant to the process of European integration.
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Fatma Taşkın


Fatma Taskın ¸ Eichengreen and Choudhry address the important issue of how to manage large capital flows to avoid crisis in emerging economies. The chapter focuses on two groups of emerging economies, namely Central and East European (CEE) and East Asian countries, and reviews the risk of large inflows of capital and appreciation of exchange rates for these countries. After evaluating alternative strategies for the management of the inflows and the exchange rate regimes the authors arrive at the conclusion that fiscal management is the most effective strategy. Eichengreen and Choudhry state that CEE and East Asian countries are similar in many aspects, such as large private inflows of capital and stable exchange rate policies with their trading partners. However, they differ significantly in their savings and investment balance and the repercussions of this imbalance for the equilibrium in the rest of the economy. The challenge in devising policies for the management of large capital inflows originates from these differences. They stress that the East Asian countries, with more growth to catch up and favourable demographic conditions have higher saving rates. With better fiscal discipline, which exerts less of a burden on the private savings and prudent selection of investments, following the financial crisis of 1997–98 the countries have a surplus in their domestic investment–savings balance. The surplus in the savings– investment balance in these countries translates to current account surplus and reserve accumulation. The authors emphasizes that CEE countries...

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