Typical a la Turca, we have started debating on where the IMF money should go to although we are still in the show me the money stage.
Over the weekend, CBT President Durmus Yilmaz said that although they could definitely make use of it at the Bank, it would be better if the IMF money went to the Treasury for use in improving debt-rollover ratios.
The more traditional argument is that the money should go to the CBT and than on to the private sector for FX liquidity needs and/or easing credit conditions in a some kind of credit insurance scheme.
Joking aside, I am really glad Yilmaz made the alternative case. While I have highlighted both crowding out from debt-rollover and real sector liquidity woes as clear and present dangers a number of times in my Hurriyet columns, I am not sure which one of these would be a more binding constraint.
But I do not have to utter an opinion, as I am not in the decision maker's seat and writing these lines from the comfort of my own warm and cozy home. But the mere fact that different opinions are being expressed in an important issue makes me happy, especially after having followed the excellent debate on the merits of a fiscal stimulus in the US with envy and wondered why we do not get that in Turkey.
BTW, speaking of that, Cochrane has written one of the best pieces written on fiscal stimulus so far: I believe it should be required reading for any macro course.
Over the weekend, CBT President Durmus Yilmaz said that although they could definitely make use of it at the Bank, it would be better if the IMF money went to the Treasury for use in improving debt-rollover ratios.
The more traditional argument is that the money should go to the CBT and than on to the private sector for FX liquidity needs and/or easing credit conditions in a some kind of credit insurance scheme.
Joking aside, I am really glad Yilmaz made the alternative case. While I have highlighted both crowding out from debt-rollover and real sector liquidity woes as clear and present dangers a number of times in my Hurriyet columns, I am not sure which one of these would be a more binding constraint.
But I do not have to utter an opinion, as I am not in the decision maker's seat and writing these lines from the comfort of my own warm and cozy home. But the mere fact that different opinions are being expressed in an important issue makes me happy, especially after having followed the excellent debate on the merits of a fiscal stimulus in the US with envy and wondered why we do not get that in Turkey.
BTW, speaking of that, Cochrane has written one of the best pieces written on fiscal stimulus so far: I believe it should be required reading for any macro course.
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