Today, on July 27, 2023, Hafize Gaye Erkan, the Governor of the Central Bank of the Republic of Turkey, introduced herself to the Turkish public by presenting the third Inflation Report. The Central Bank of the Republic of Turkey prepares and releases this report to the public four times a year. Prior to delving into the meeting's details and the CBRT's institutional capacity, it is important to highlight that Erkan demonstrated her ability to read and comprehend the report prepared by the CBRT staff. This might sound peculiar, but it addresses a previous issue where the former CBRT governor occasionally made statements that contradicted the content of the report during both report presentations and the question and answer sessions that followed.There were instances when questions about certain aspects of the report were answered in a manner that deviated from both the report's content and the principles of economic science. This could be attributed to the former president's political involvement. However, even when faced with more technical questions posed by economic reporters or investment professionals, it became evident that he lacked detailed knowledge on the subject. Considering merit and bureaucratic capacity in Turkey, it is now possible to assert that Hafize Gaye Erkan, despite not being an economist, instills more confidence in the market, if not complete confidence.When it comes to the institutional capacity and the principle of independence of the Central Bank, unfortunately, Erkan has not lived up to the expectations of his position. Given the way Turkey is governed and President Erdoğan's governing style, it appears unlikely that Erkan would openly criticize Erdoğan. Instead, he has chosen to indirectly refer to the previous period. For example, he mentioned that when he assumed office, he encountered a "gift of macroprudential measures," implying that some actions were taken without careful consideration. He acknowledged the inconsistency in these measures, with some being expansionary and others tightening. Erkan emphasized the need for simplification to address this confusion.While making these technical criticisms of the previous period, Erkan was asked by a reporter about his thoughts on Erdoğan's thesis that 'interest is the cause and inflation is the effect', a notion that has dominated the discourse on the Turkish economy in recent years. However, Erkan did not respond to this question, stating that he did not want to get into political issues. Nevertheless, this was a highly technical matter, despite being politicized by Erdoğan. Frankly, I would have expected Erkan to briefly explain the conditions under which this view is valid or not, and if necessary, mention the Neo-Fisherian effect, while indicating that it might not be a valid model for the Turkish economy.&nbsp;Since we were talking about technical issues, these question marks could have been addressed in a very coherent and scientific way without Erdoğan being strongly criticized. But in a system like the "presidential government system", where the winner wins everything and can impose his point of view on the entire bureaucratic structure, it seems that we will not be able to talk about the independence of the Central Bank or the president's representation of the position he occupies for a long time. <hr fr-original-style="" style="height: 0px; overflow: visible; border-bottom: none; clear: both; user-select: none; break-after: page; box-sizing: border-box;"> 1 Atilla Yazar ve diğerleri [GK], B. No: 2016/1635, 5/7/2022; şuradan erişilebilir: https://kararlarbilgibankasi.anayasa.gov.tr/BB/2016/1635&nbsp;2 Abbas Yalçın ve diğerleri, B. No: 2014/8146, 29/3/2023; şuradan erişilebilir: https://kararlarbilgibankasi.anayasa.gov.tr/BB/2014/8146 &nbsp;3 https://oad.org.tr/yayinlar/rapor/turkiyede-basin-ozgurlugu-raporu-%e2%80%a82022/

The Freedom Observer

While making these technical criticisms of the previous period, Erkan was asked by a reporter about his thoughts on Erdoğan's thesis that 'interest is the cause and inflation is the effect', a notion that has dominated the discourse on the Turkish economy in recent years. However, Erkan did not respond to this question, stating that he did not want to get into political issues. Nevertheless, this was a highly technical matter, despite being politicized by Erdoğan.

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