Orthodox Stabilization Programs Implemented in Turkey After 1980: Decisions of January 24 and April 5

Stabilization programs are implemented with the aims of becoming the economy -which the high inflation (hyperinflation or chronic high inflation) prevails- normal and exceeding the problems of balance of payments. Orthodox policies see inflation arising in the economy, the deficit in balance of payment and budget deficit as the sources of monetary expansion, overvalued exchange rate and disequilibrim in public sector resource expenditure. Whilst orthodox policies consider inflation as an only monetary phenomenon, heterodox policies are implemented based on the belief that structural defects and income conflict are embedded in the source of inflation. Heterodox stabilization policies have three pillars: price-wage controls, budgetary discipline and fixed Exchange rate policy. In the study, the decisions of January 24 and April 5 which have the quality of stabilization program are evaluated by analyzing previous and latter economic structure. In terms of the results realized, the implementation of 1980 program figüre the problem of balance of payment out relatively at the cost of distorting public finance equilibrium, being income distribution ineffective and becoming the economy open to the speculative foreign capital fluctuations. 1994 decisions provides returning the spiral of interest-exchange rate scissors by evaluating the economic crisis as a deviation.