International Conference on Eurasian Economies
17-18 September 2013 – St. Petersburg, RUSSIA
Paper detail
Paper ID : 724
Status : Paper published
Language : English
Topic : Finance and Financial Crises
Presenter: Ph.D. candidate Fatih Konak
Session : 6A Finance II
Was the Turkish Financial Crisis in 2001 Caused by External or Internal Factors?
Was the Turkish Financial Crisis in 2001 Caused by External or Internal Factors?
- Ph.D. candidate Fatih Konak (Hitit University, Türkiye)
- Ph.D. candidate Hakan Turan (Hitit University, Türkiye)
Abstract
There has been much discussion on the issue of whether financial crisis are caused by external factors or internal factors. This research has attempted to demonstrate what were the real reasons whether internal or external factors, behind the Turkish financial crisis in 2001. The crucial question that demands an answer is ‘which one of them overwhelmingly triggered the crisis. It was argued that before the crisis occurred, the Turkey economy had been affected by some unfavourable external shocks such as, rise in crude oil prices which increased the current account deficit; however, it can be seriously solved by employing correct finance technique that using long-term capital and direct investment instead of short-term capital. Therefore, external factors effects on the economy can be eliminated by right monetary policy, which means they were not the key factors. On the other hand, there were many internal factors behind the crisis such as fragile finance and banking system, ruling out dis-inflation negative effects and seasonal factors and so on. It could be advocated that these factors led the Turkish economy into uncertain situation and they had central part in the crisis because, when the last global financial crisis was occurred in 2008, although all unexpected external factors were soared, the Turkish economy was less affected, because the Turkish economy has been become more durable by solving the internal triggering factors.
JEL codes: G01, G28
Konak, Fatih, Turan, Hakan (2013). "Was the Turkish Financial Crisis in 2001 Caused by External or Internal Factors?" in Proceedings of International Conference of Eurasian Economies 2013, pp.181-188, St. Petersburg, RUSSIA.
DOI: https://doi.org/10.36880/C04.00724
