KÜRESEL POLİTİK EKONOMİ

In general, situations of recession, inflation and deflation are considered as the economic crisis.

Inflation: A continuous increase in the general price level of goods and services

Real Sector Crises: Contraction in production or employment in the field of goods and services.

During a financial crisis, we have a reduction of the portion of capital evaluated in real production, not a rise.

Current Account: Real exchange rate, current
account balance, foreign trade balance,
export and import, export price indices,
savings and investments,

Government change is not an institutional-structural factor.

Unemployment crisis is a real sector one.

All of them are true.

USA and Russia were at the opposite ends of the cold war.

2008 was the year of the Global Financial Crisis.

In general, situations of recession, inflation and deflation are considered as the economic crisis.

Recession: The decline in real GDP due to a decline in economic activities of a state in at least two quarters, a stage of pause and contraction in economic activities.

Inflation: A continuous increase in the general price level of goods and services.

Deflation; also referred to as negative inflation, is the continuous decrease in average prices.

The main elements and characteristics of financial crisis can be listed as follows: • Uncertainty in the financial system changes expectations to a great extent, • Financial institutions worry about cash problems, • Decreases in profit will create a base for bankruptcies, • Increase in interest rates and contraction of economic activities, • Sudden and unexpected emergence, • To cause the crisis to grow or to cause a new crisis by spreading to another country, • To create new opportunities besides danger and threats, • The duration depends on the measures to be taken, • Reduction of the portion of capital evaluated in real production,• Speculative international capital movements, • Wrong economic policies and structural deteriorations, • Increase in public deficits, current account deficit and savings deficit, • Excessive exchange rate, • The banking system may be problematic, unchecked, and bank panics occur

The basic indicators they use in these studies have been elaborated in ten subheadings (Kaminsky, Reinhart & Lizondo, 1997: 10-11): • Capital Account: International reserves, capital flows, short-term capital flows, foreign direct investments, differences between domestic and foreign interest rates, • Debt Profile: Total external debt, external debt of the public sector, short-term debt, distribution of debt according to interest and credit, foreign aid, • Current Account: Real exchange rate, current account balance, foreign trade balance, export and import, export price indices, savings and investments, • International Variables: Real growth rate, interest rates and price level, • Financial Liberalization: Loan growth, change in money multiplier, real interest rates, spread between bank borrowing and deposit rates,• Real Sector: Real GDP growth rate, production, wages, changes in stock prices, employment/unemployment, production deficit, • Budget Variables: Budget deficit, government expenditures and public sector loans, • Other Financial Variables: The amount of credit transferred by the Central Bank to the banking system, the gap between money demand and supply, bond yields, domestic inflation rate, shadow exchange rate, M2/international reserves, • Institutional-Structural Factors: Openness, foreign exchange controls, period of time in which fixed exchange rate system is applied, financial liberalization, banking crises, past crisis crises, • Political Variables: Government changes, political instability, developments that lead to loss of confidence, and unnecessary election decisions

Moratorium: The Borrower declares that they cannot pay all or part of their debts due to the loss of their ability to pay.

Convertibility: It means that a country’s money can be converted to gold or to other country’s money under a measure called exchange rate or parity.

In the international system, globalization means that the economic, political, and cultural elements of states extend beyond the national boundaries, spread around the world, and facilitate and increase the political and economic interactions between states.

Fixed Exchange System: It is the system where the Central Bank interferes with the foreign exchange, prevents the decreases and fluctuations, and tries to keep the exchange rates in a stable balance.