EconoMonitor

The Kapali Carsi

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.

Last but not the least, here’s Good Bye Lenin, with English subtitles. It is my second. most fav. East Germany, or more generally Iron Curtain, movie, with my favorite being Lives of Others. Watch both is you haven’t already- you can thank me later! They both make you laugh, cry and in general appreciate the beauty of movies. And BTW, RIP Ulrich Muhe, who passed away a year or so after this movie…

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