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The Woman in Charge of Saving Turkey’s Economy The Woman in Charge of Saving Turkey’s Economy
(3 days later)
When all hope is lost, hire a woman to take over (and take blame). Studies of the so-called glass cliff have found that companies are more likely to bring women on as chief executives or directors when business is bad. Linda Yaccarino, the new chief executive of the foundering Twitter, seems to fill the bill.When all hope is lost, hire a woman to take over (and take blame). Studies of the so-called glass cliff have found that companies are more likely to bring women on as chief executives or directors when business is bad. Linda Yaccarino, the new chief executive of the foundering Twitter, seems to fill the bill.
Now there’s Hafize Gaye Erkan, a former Wall Street banker who has been named the new central bank governor of Turkey. It’s the cliffiest of all glass cliffs. Brad Setser, a senior fellow at the Council on Foreign Relations, wrote in a blog post last week that thanks to years of bad policies, Turkey faces “what appears to be an imminent financial crisis.”Now there’s Hafize Gaye Erkan, a former Wall Street banker who has been named the new central bank governor of Turkey. It’s the cliffiest of all glass cliffs. Brad Setser, a senior fellow at the Council on Foreign Relations, wrote in a blog post last week that thanks to years of bad policies, Turkey faces “what appears to be an imminent financial crisis.”
Erkan’s tenure at the Central Bank of the Republic of Turkey will be closely watched for many reasons, only one of which is that she’s the first woman in the post. Turkey is a vital player in diplomacy — a member of NATO that is playing a delicate game in the war at its doorstep. It “has consistently supported Ukraine politically and militarily without alienating Russia economically,” Yevgeniya Gaber, a nonresident senior fellow at the Atlantic Council in Turkey, wrote recently.Erkan’s tenure at the Central Bank of the Republic of Turkey will be closely watched for many reasons, only one of which is that she’s the first woman in the post. Turkey is a vital player in diplomacy — a member of NATO that is playing a delicate game in the war at its doorstep. It “has consistently supported Ukraine politically and militarily without alienating Russia economically,” Yevgeniya Gaber, a nonresident senior fellow at the Atlantic Council in Turkey, wrote recently.
Turkey also has the world’s 19th-largest economy, with a gross domestic product of nearly $1 trillion a year, according to the World Bank. Solving a currency crisis in a country as big as Turkey wouldn’t be easy for the International Monetary Fund, nor is it clear that Turkey would be willing to accept the I.M.F.’s conditions to get its money.Turkey also has the world’s 19th-largest economy, with a gross domestic product of nearly $1 trillion a year, according to the World Bank. Solving a currency crisis in a country as big as Turkey wouldn’t be easy for the International Monetary Fund, nor is it clear that Turkey would be willing to accept the I.M.F.’s conditions to get its money.
Economists have an additional reason to pay attention to Turkey. It is a rare specimen. Its most pressing problem, a shortage of foreign currency, is fairly common, but how it got into its mess is unique: Its president, Recep Tayyip Erdogan, has defied conventional wisdom and insisted that the best way to fight inflation is to lower interest rates, not raise them.
That vaguely resembles a theory of a 20th-century American economist, Irving Fisher. Erdogan has never cited Fisher, though. What he has said is that “interest rates are the mother and father of all evil.”