What is next for Turkey? Time to print money?
Selva Demiralp writes: Things are different in Turkey. We could hardly reach the inflation target even at the most favorable times and gave in to populist policies. Thus, mismanaged debt monetization can lead us all the way to hyperinflation. The way to prevent inflation is to drain the money effectively just as demand starts to pick up.
Duvar English
Economics Professor Selva Demiralp has penned a piece on the current economic situation in Turkey, as well as the aid package of 100 billion Turkish Liras (about $15.4 billion) announced by President Recep Tayyip Erdoğan last week.
"Things are different in Turkey. We could hardly reach the inflation target even at the most favorable times and gave in to populist policies," Demiralp said.
About the package, she said, "One of the main components that is missing in the package is the absence of direct transfer payments to those who have lost their jobs or experienced interruptions in their income streams due to the pandemic. If the lost income and salaries are not replaced by the government, it is impossible to keep the wheels of the economy turning."
You can read Demiralp's piece here.