Outward Orientation and Exchange Rate Policy in Developing Countries: the Turkish Experience
Turkey had long pursued an inward-oriented development strategy but changed its policy orientation in January 1980 in response to the economic crisis which it experienced. This essay places the economic policies applied in Turkey in an international context, with a view to further our understanding of the changes that have occurred since 1980. The essay will also consider possible future reform measures in Turkey, with attention given to short-term as well as to long-term objectives.
KeywordsExchange Rate Interest Rate Real Exchange Rate Real Interest Rate Exchange Rate Policy
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- 1.This section of the paper draws on the author’s Grahm Lecture, ‘The Process of Industrial Development and Alternative Development Strategies’, Essays in International Finance (Princeton, NJ: Department of Economics, Princeton University, 1981) No. 141. Published in B. Balassa, The Newly-Industrializing Countries in the World Economy (New York: Pergamon Press, 1981) pp. 1–28.Google Scholar
- 3.The Turkish experience with inward orientation was examined in B. Balassa, ‘Growth Policies and the Exchange Rate in Turkey’, in The Role of Exchange Rate Policy in Achieving the Outward Orientation of the Turkish Economy (Istanbul: Meban Securities, 1980) pp. 15–19. Reprinted under the title ‘Policies for Stable Economic Growth in Turkey’, in Balassa, The Newly-Industrializing Countries in the World Economy, pp. 297–328, and in B. Balassa, ‘The Policy Experience of Newly Industrial Economies After 1973 and the Case of Turkey’, The Role of Exchange Rate Policy in Achieving the Outward Orientation of the Turkish Economy — II (Istanbul: Meban Securities, 1981) pp. 1–35. The latter paper also considered the preliminary results of the 1980–81 reforms.Google Scholar