Global Financial Crisis and Turkey: Effects and Suggestions

A global financial crisis hit the world in late 2008. It has become clear that this financial crisis will have a deep impact on countries’ trade volumes and investment plans. When the crisis has started on the financial markets, it affected developed countries as much as developing ones. Since the beginning of September 2008, it has been deepening in USA, while spreading out to the world. Turkey is one of the countries affected from this global economic crisis. Turkey had became dependant on capital accumulation movements after 1990s. Growth with capital accumulation movements constituted a relationship between capital movements and balance of payment. Growth related to short run capital movements provided money from money instead of production. So it affects investments negatively and this makes a negative effect on growth in long run period. The clearest effect of global crisis on Turkey is unemployment and inflation. Although it is very difficult for Turkey to put these two in order, in the last years they have been decreasing through policies, but with this global crisis they have increased again.