Is one of you an economist?
Added 2020-06-07 08:03:03 +0000 UTCI need to summarize and explain the Turkish debt and inflation crisis of 1994. As far as I understand what I am reading what happened is that:
1: The central bank refused to further bail out the government as the 90s started.
2: Public debt increased - but the countries economy continued having a good rating by rating agencies due to the economic successes of the 1980s.
3: This encouraged people and institutions in Turkey to continue taking on loans on outside rates that didn't reflect the real state of the Turkish economy, thereby making the Turkish economy more volatile.
4: The deregulation of financial markets during the 80s caused an increasing number of Turks to invest in foreign economies and use deposits and savings in foreign currencies.
5: The reduction fo tariffs during the 80s gradually caused a trade imbalance as Turkey imported more than it exported, causing a gradual flow of capital out of the country.
6: Increasing public spending and corruption caused public debt to rack up even more.
7: In 1993 the Central bank refused to give any additional loans to the government if the government didn't engage in significant monetary policy to reduce debt, which caused the value of the Turkish currency to collapse.
This paper is what I mainly got this from:
http://documents.worldbank.org/curated/en/965221468777258191/pdf/multi-page.pdf
I am not an economist and would like to ask if someone here may know if I got something wrong?
