Recep Tayyip Erdogan may have been placing his own future on the line as he pledged to lead Turkey in fighting an “economic war of independence” against markets.
The MMT and monetary theories of Mad³ are in full display here. They’re printing money to spend so as to meet need. They’re not raising interest rates in order to beat inflation because that’s regressive. They’re fighting to maintain the FX value of that currency.
And they’re finding that you can’t control all three at the same time. Which is what will happen to the Bawbee as well.
No doubt the P³ has some reason why this won’t in fact apply but it’s difficult to see what.
As the president forces his central bank into market-rattling interest rate cuts that defy the laws of economics, prices are soaring and the country’s currency is in freefall – along with his people’s confidence.
The Turkish president has pursued policies widely rejected by mainstream economists, shredded the central bank’s independence and vowed to fight high interest rates,