Alan Longbon — Could Turkey Default? The Maths Say No

Most of the "analysis" of Turkey being offered is nonsense. Speculators following it will be taking the losing side of the trade.

Alan Longbon nails it. This post is the best available that I am aware of.  

The title is too limited. The article comprehensive. 

Does President Erdogan understand MMT? And maybe President Putin, too? Is the world waking up?

To early to tell but the signs are encouraging.

President Erdogan realizes that that the international institutions like the IMF and the global capitalist elite they are represent are on the same neoliberal page. 

Erdogan is also aware that like other central bank the Turkish central bank is on this same page. Can he crack central bank independent. The "international community" is warning him not to try. 

That would be "dictatorial," you see, and undercut the currency even more — as "they" do their best to create a financial crisis to effect regime change.

BTW, this article is an excellent example of MMT analysis in action. Alan Longbon is worth following if you are not already.

Seeking Alpha
Could Turkey Default? The Maths Say No

Alan Longbon

Adam Garrie — Turkey Officially Turns to China For a Long Term Economic Partnership

Turkey’s President Recep Tayyip Erdogan has spoken about the primary objectives during the first 100 days of his new administration. Speaking of western financial speculation against the Turkish Lira, Erdogan reiterated that the country is “facing an economic war, but we will win it”. As part of his strategy to win the western war against Turkey’s monetary policies and existing economic growth model, Erdogan announced that for the first time in history Ankara will issue state bonds in Chinese Yuan Renminbi and that the country looks forward to opening up new credit lines with China as a viable and sustainable alternative to borrowing from European or American financial institutions. In hailing the beginning of a “new era” for Turkey, Erdogan further stated that in the future, Turkey’s most important export partnerships with be with China, Russia, Mexico and India. The Turkish President also stated that the country plans to built special trade centres in 35 major cities across the globe....

How long will Turkey remain in NATO?

Eurasia Future
Turkey Officially Turns to China For a Long Term Economic Partnership

Adam Garrie

Dani Rodrik — Turkish economic myths

Preparing for a panel discussion on Turkey gave me the opportunity of putting together some notes and slides on the country’s economy.

That Turkey is not doing well at the moment, economically or politically, is well known. But the roots of the problem remain misunderstood. Many analysts blame the weakening of “structural reforms” (on economics) and the turn towards authoritarianism after the Gezi protests in 2013 (on the politics). See for example here. In truth, Turkey’s problems on both fronts predate the recent slowdown in growth and have been long ingrained in the governing party’s (AKP) strategy. I have discussed the politics before at length. Here I focus on the economics.….

Of the rails here.

The AKP government was able to move the public sector into surplus (except for the crisis year of 2009), an achievement for which it receives great credit. But this improvement was more than offset by a substantial deterioration in the private sector balance. What has happened, in other words, is that the private sector has been encouraged, through easier access to credit, to go on a borrowing binge. Financial indiscipline and reckless have not disappeared; they have moved from the public to the private sector.…

If the government increases its surplus ("net saves"), then the private sector must increase its deficit ("net borrow") unless the external sector offsets the increase in government "saving" by saving less, that is, net exports much increase correspondingly.

Dani Rodrik's Weblog

Turkish economic myths

Dani Rodrik | Albert O. Hirschman Professor of Social Sciences at the Institute for Advanced Study in Princeton, New Jersey