Working papers, Department of Economics, WU (Wirtschaftsuniversität Wien)
Speculation-led growth and fragility in Turkey: Does EU make a difference or "can it happen again"?
Abstract: The aim of this paper is to analyze the pattern of
speculation-led growth in Turkey. It is dependent on international capital
flows, whose continuity becomes more and more critical given the current
account deficit, which is estimated to reach 6.1% as a ratio to GDP at the
end of 2005. The paper assesses the sustainability of this speculation-led
growth in the context of EU enlargement and compares the current state of
fragility with former crises in Turkey as well as in East Asia and Latin
America. Following a severe financial crisis in 2001, Turkey has entered a
new phase of fragile growth led by boom-euphoric expectations. The paper
aims at explaining this new phase and the evolution of the risk perceptions
of both the creditors as well as the debtors in this "speculation game"
based on the post-Keynesian/Minskyan concepts of endogenous expectations
and financial fragility.
JEL-Codes: E12; G15; G32; O52; (follow links to similar papers)
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