The Turkish Crisis of 2001: A Classic?
In February 2001, Turkey became the latest emerging market to experience a devastating crisis, following the collapse of its soft exchange rate peg. The crisis severely damaged the country's banking system and led to an unprecedented contraction in economic activity. The boom that preceded it seemed to be relatively short lived, as the initial rush of capital outflow occurred just eleven months after the start of the program, and the fatal exit just three months later. This paper discusses the factors that seemed to play an important role in the collapse of Turkey's International Monetary Fund (IMF)-supported exchange rate-based stabilization plan just thirteen months after its commencement. It is often difficult to attribute such crises entirely to a single factor, and not always possible to arrive at a strong verdict by analyzing economic developments in light of, or in the manner formally suggested by, the alternative models commonly used to analyze currency crises in the literature. In the Turkish case, enumerating the many factors that may have contributed to the collapse is important and very useful--yet this should not obscure the critical role played by the failure to establish or achieve tangible progress toward a sustainable fiscal regime. Not recognizing this fundamental weakness could easily lead observers to emphasize design flaws as the main culprit or to argue that the collapse could have been avoided if several other factors had broken more in Turkey's favor.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 42 (2006)
Issue (Month): 1 (February)
|Contact details of provider:|| Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=111024|
When requesting a correction, please mention this item's handle: RePEc:mes:emfitr:v:42:y:2006:i:1:p:5-32. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen)The email address of this maintainer does not seem to be valid anymore. Please ask Chris Nguyen to update the entry or send us the correct address
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.