Lessons from the fall of the Wall for Turkey
If you fell into a coma in East Germany in October 1989 and woke up a few months later – like the protagonist’s mother in the German movie “Good Bye Lenin!” – you would find yourself in a completely different country.
This is the introduction to my latest Hurriyet Daily News (HDN) column, where I try to explain why growth in the Iron Curtain was uneven, and what this may mean for Turkey. You may read the whole thing at the HDN website. I have a couple of additional points to make:
For one thing, I should say that I wasn’t the first one to write about the discrepancy in the macro figures PM Davutoglu presented. Independent journalist Tarik Yilmaz, who runs the exceptionally-fun Turkish economy infographic site manset.at and Radikal/Hurriyet columnist Ugur Gurses wrote about the issue soon after Davutoglu’s press conference. Unfortunately, both pieces are in Turkish. Gurses explained in his following column that the $ 1.3 trillion 2018 GDP target was the result of a “copy and paste error”: It tuns out that policymakers simply increased nominal GDP by 10 percent every year to come up with their “forecaasts”, also penciling in a 3-4 percent devaluation. But they mistakenly used the 2013 exchange rate of 1.97 to convert liras into dollars in 2018, which yielded the $ 1.3 trillion figure. So not only they used a calculation not even intro. macro students would not use to come with their “forecasts”, they also managed to mess up the idiotic calculation. Out-stand-ding!
Moving on, here’s the IMF event I refer to in my previous column- the one I hyperlinked to at the end of the column. Ministers’ on-the-ground experience on the challenges to reform was very interesting.
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