External and Internal Factors of the Turkish Crisis in the Year 2001 Analysis Proposal

Abstract

This research has attempted to demonstrate what were the real reasons whether internal or external factors, behind the Turkish financial crisis in 2001. The Turkey economy had been affected by some unfavourable external shocks such as, rise in crude oil prices which increased the current account deficit. However, external factors effects on the economy can be eliminated by right monetary policy. On the other hand, there were many internal factors behind the crisis such as fragile finance and banking system, ruling out dis-inflation negative effects and seasonal factors and so on. It could be advocated that these factors led the Turkish economy into uncertain situation because, when the last global financial crisis was occurred in 2008, although all unexpected external factors were soared, the Turkish economy was less affected, because the Turkish economy has been become more durable by solving the internal triggering factors.