Question

What are the most important macro-economic problems of Turkey's economy. Explain the emergence of these problems with cause and effect relationships. Use theoretical concepts in your explanations.

Answer 1

The most important rising issues in Turkey are higher unemployment and staggering inflation numbers, surmounting government debt, excessively high tarriffs and depreciation of its currency, higher fiscal and current account deficit.

The causes are attributed to poor governance and instability of elected party, large pumping of money by central banks, poor policy timing and implementation lags, loose expansionary policy for large terms.

The effects are rising national debt which has promoted tight government spending and thus unemployment has risen triggering widespread recession and devaluation of currency.

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