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Post liberalization global financial crises: Comparison with 2006-2007 fluctuations


  • Leyla BAŞTAV

    (Bankacılık Düzenleme ve Denetleme Kurumu)


The study aims to analyze post-liberalization episode movements with emphasis on crises and turbulances of 1990’s and 2000’s and provide macroeconomic policy advice. During 1990’s crises, moral hazard due to insufficient supervision in financial markets and intermediate foreign exchange regimes under liberal capital account have been relevant. During 2006-2007, global inflationary growth and anti-inflationary policies have prevailed economic conjuncture. Developed economies’ policies have caused imbalances in financial markets already in vulnerability due to asset price bubbles and credit expansion. The vulnerabilities have brought sudden stop, self-fulfilling prophecies further fuelling outflows with worsening expectations. In the new global structure, crises mostly stem from financial markets, money market imbalances, self-fulfilling prophecy and sudden stop. Enhanced supervision in financial markets, considering macroeconomic policies’ effect on markets and curbing capital flows are needed. Also imbalances should be removed via changing pattern of savings, absoption and foreign deficits by appropriate macroeconomic policies.

Suggested Citation

  • Leyla BAŞTAV, 2009. "Post liberalization global financial crises: Comparison with 2006-2007 fluctuations," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 24(276), pages 98-115.
  • Handle: RePEc:iif:iifjrn:v:24:y:2009:i:276:p:98-115

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    References listed on IDEAS

    1. Kuttner, Kenneth N., 2001. "Monetary policy surprises and interest rates: Evidence from the Fed funds futures market," Journal of Monetary Economics, Elsevier, vol. 47(3), pages 523-544, June.
    2. Gurkaynak, Refet S. & Sack, Brian T. & Swanson, Eric P., 2007. "Market-Based Measures of Monetary Policy Expectations," Journal of Business & Economic Statistics, American Statistical Association, vol. 25, pages 201-212, April.
    3. Refet S. Gürkaynak & Brian Sack & Eric Swanson, 2005. "The Sensitivity of Long-Term Interest Rates to Economic News: Evidence and Implications for Macroeconomic Models," American Economic Review, American Economic Association, vol. 95(1), pages 425-436, March.
    4. Özge AKINCI & Burcu GÜRCİHAN & Refet GÜRKAYNAK & Özgür ÖZEL, 2007. "Devlet iç borçlanma senetleri için getiri eğrisi tahmini," Iktisat Isletme ve Finans, Bilgesel Yayincilik, vol. 22(252), pages 5-25.
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    More about this item


    Post- liberalization crises; Financial globalization; Sudden stop; Self fulfilling prophecies; Capital flow controls;

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles


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