IS THERE A WAY OUT FOR THE TURKISH ECONOMY?
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International trade is one of the most important issues of macroeconomics. Almost all international trade theories have tried to determine which country produces what, for which price it sells its products to whom. In a number of theories, these inequalities are based on the differences between factor endowment, while in some others they result from technological development or capital accumulation. However, very few theories have revealed that these differences bear the traces of colonial period. Financial liberalization and the spread of international capital movements by the end of colonialism were major developments in the second half of the 20th century. It is no coincidence that these developments occurred simultaneously. The financial revolution has led to a new kind of relationship between capital owner countries and the others. This is a sort of centre-periphery relationship. Those peripheral countries are the ones that have been affected by the hitches of last slowdown of the world economy. Just like Argentina, Turkey has encountered problems such as the higher inflation rate and the inevitable rise in interest rates, following the melting down in currencies in 2018. Again, in the same period, in contrast with the conventional economic views, current account deficit shrank depending not on the increase in exports, but the dramatic decline in imports instead. As a result of all these occurrences, there was a great loss of prosperity in the country. This study investigates whether it is possible for countries depending on the foreign capital like Turkey and Argentina to follow an independent policy from the fluctuations in the economic conjuncture or not. Is it possible to develop permanent policies that will eliminate dependency on foreign capital, instead of familiar ones such as targeting in inflation, exchange rate or current account deficit? Which has a higher cost? To develop and implement these policies, or to sway in every wind?