Wednesday, December 22, 2021

Bill Mitchell — Turkey–who is squeezing who?

It’s Wednesday and a shorter blog post, which includes the latest from Turkey and some music. The mainstream narrative against Modern Monetary Theory (MMT) has been ramped up significantly in recent weeks as a result of events in Turkey, where, up until yesterday, the currency had depreciated significantly. The screams for interest rate rises from bankers etc (of course! they profit or protect foreign debt exposure) have been deafening. But the most recent monetary policy decision was on December 16, 2021, when the CBRT reduced its policy rate (the one-week repo auction rate) from 15 per cent to 14 per cent. The ‘markets’ can’t really get a handle on the current government’s thinking because it is running against the mainstream in several ways, including cutting rates to reduce inflationary pressures (see Press release on Interest Rates – from the CBRT). Overnight a big swing happened after the government made a significant fiscal policy announcement. That will further confound the markets who were forced to scramble to close out short-selling positions as the lira appreciated by around 25 per cent in one day. The fiscal squeeze worked. You couldn’t make this stuff up....
Bill Mitchell – billy blog
Turkey – who is squeezing who?
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

4 comments:

lastgreek said...
This comment has been removed by the author.
lastgreek said...

Caustic comment. thought better of it, so deleted it. Yeah, I should probably be on some math blog instead :(

Did I ever tell you about exponential functions and why they are one of the most important subjects in all of math. It's really where calculus starts, you know :)

Unknown said...

Could you elaborate? Both (if appropriate) on: Dr Mitchell's article and/or the Turkish bank/govt/market players, and on: why calculus starts with exponential functions?

Matt Franko said...

The derivative of a non exponential function is always the coefficient of x …. So why have differential calculus if the differential is always the coefficient ? You would just always refer to the coefficient (slope)