The case for a currency board
What if Turkey adopts a currency board which issues notes and coins convertible on demand into dollars, would that solve the lira’s current woes? No, argues John Cochrane because Turkey’s real problem is its government debt. Turkey, he adds, needs to control all government debt to control inflation.
Turkey right now is also a good example to keep in mind for the vast majority of the economic establishment that thought it awful that Greece didn’t have its own currency, so that in its fiscal troubles it could do exactly what Turkey is doing now.
Lira Crash
By: John Cochrane – Stanford University
The road to the IMF
If Turkey turns to the IMF for help it will be the second time it does so in the last 18 years. Jacob Kirkegaard reminds us that in 2001 Turkey received $19 billion in assistance from the IMF. The Fund usually imposes tough economic programs to “repeat IMF customers” but does Erdogan have some leverage this time?
A seemingly imminent Syrian government attack on the rebel-held Idlib province, just south of the Turkish border, could easily unleash another refugee emergency inside Northern Syria. The Turkish-Syrian border is now guarded by an actual border wall, something that did not exist in 2016. Turkey’s decision whether or not to open its borders and again provide refuge for Syrians could well be political in nature, possibly contingent on economic aid from the West or the terms of an IMF rescue package.
Turkey Faces Its Crisis with Shaky Leadership and Few Friends
By: Jacob Funk Kirkegaard – Peterson Institute
