Financial reforms, stabilization and development in 21st-century Turkey

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Vernon Press, Dec 22, 2016 - Business & Economics - 486 pages

 The central argument of this book is that while central bank independence can contribute to stabilization, inflation-targeting monetary policy is quite powerless in promoting economic development. The basic message is simple: Policy makers should not strive to achieve price stability at any cost, as stability in product markets does not necessarily translate into economic development. The recent experience of Turkey is illuminating and other developing countries, in particular those using inflation targeting monetary policy framework, can draw useful lessons from this experience.


Early chapters summarize the deregulation process from 1980 to 2001. The Turkish Central Bank is placed at the center of the analysis as monetary policies have a significant impact both on stability and development. Although the 1994 and 2001 financial crises have been extensively studied elsewhere, they are nevertheless summarized to underscore the importance of central bank independence. Later chapters investigate the impact of an independent central bank on stabilization and development from 2001 onwards. 

Upon visiting the Turkish Central Bank's website, readers are greeted with the following statement: 

"The primary objective of the Bank is to achieve and maintain price stability." By the end of this book the reader should be able to assess the relative merits of a monetary policy that focuses on price stability, versus an alternative where price stability is accompanied by other objectives targeting development, for instance, monitoring also unemployment rates, which would undermine its independence to some degree. The study aims to provide a perspective on the need for such an alternative in line also with the vision of some international agencies on development, such as the UNCTAD and the ILO.


This is the first book-length study examining the financial reforms Turkey undertook in its path towards EU accession. This unique work will be of interest to economists and other experts in financial history, (de)regulation, institutional economics and economic development, as well as a broad range of scholars interested in the dramatic transformation of Turkey's economy and society in the 21st century.


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Introductionhypotheses and research
Deregulation Process and Macroeconomic
Consequences of Deregulation in Turkish
Institutional Transformation
Post2002 Economic Performance
A Guide to Transition in Turkey
Hedge Funds
Annex3 Governments formed in Turkey from 1961
Calculating the probability of default from

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About the author (2016)

 Dr. Haluk Haksal is a researcher in development economics. He studied Economics at the University of Florence. He holds a Master of Science in Banking and Finance from the HEC/University of Lausanne and a Ph.D. in Economics from the University of Geneva. He has an expertise in development economics, debt management and financial consulting and several years of experience at the United Nations Office at Geneva, in agencies like United Nations Conference on Trade and Development and the International Labor Organization. He has also conducted research on external imbalances in the Eurozone and debt management with a development economics perspective. 

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