Question

Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece,Indonesia, Koreaa, Malaysia, Mexico, Morocco, Qatar, Peru, Philippines, Poland, Russia, South Africa, South Korea, Taiwan, Thailan, and United Arab Emirates.

A) Evaluate is unemployment situation/ policies with a historical perspective and compare it with the unemployment situation/ policies of Turkey.

B) Evulate its inflation and monetary policy with a historical perspective and compare it with the inflation and monetary policy of Turkey.

Answer 1

For the analysis of unemployment and inflationary situations and comparison, let us take the country of India

a)Unemployment analysis

· In India, informal sectors encompasses more working class than formal sectors. Thus the accessibility issues always forms some major issues in generation of unemployment in India.

· In Turkey, it is due to the lack of new industries ad the policy of nepotism that most of the people remains unemployed.

· In 1980’s the unemployment rate in India was about 2.8% and it has been raised only on a small scale as of now, whereas in Turkey, the unemployment rate has seen several ups and downs where it ranged around 10.5% in 2005 and was raised to almost 15% by 2009 which was then lowered to about 7.5% in 2012. Now, it has again seen an upsurge.

· The current unemployment rate in India is about 3.4%-3.6% whereas that of Turkey is 13.1%.

· It has to be analysed on the fact that India has a population of about 135 crores whereas Turkey has a population of only 8.2 crores.

· Thus, we can see that the unemployment patterns in India has not seen steady downfalls whereas that of turkey is different from it.

b) Inflation and monetary policy analysis

· The inflation rate is calculate using the price increase of a defined product basket which includes good and services on which an average consumer spends money

· The historical analysis states that the inflation behaviour of India has been varying. From 1984, say it was about 6.2% which increased to about 8% in the subsequent years and lowered to almost 4% by 1990’s. After the global oil crisis, it skyrocketed to about 14% in the initial stages which was brought back to about 7% by mis 1990’s. The rate was again raised by end of 1990’s due to war with Pakistan and was lowered on a considerable manner by 2003. Global economic factor affects the inflation rates and hence it was again hit by the global economic recession which caused the inflation to rise gradually from 2009 till 2014 and was brought back thereafter. The current inflation rate is about 3.4% which is expected to rise to 4.1% owing to the global corona virus pandemic that has hit the world.

· The inflation rate in Turkey has always remained high. The statistics shows that in mid 1990’s it was about 48% which raised to about 73% by the end of 1980’s. the trend saw an upward rise up to mid 1990’s where it reached more than 100% to about 105%. Thereafter, it has never raised till 2012 where it was drastically reduced to about 6%. The inflation rate has never raised to the age old levels till date although the current inflation stands at about 15% owing to the global corona crisis

· The effect of monetary policy in Turkey can be realised in the post 2001 stabilisation program, whereby it has been able to reduce the inflationary levels from more than 100% to about meagre 6% by 2012.

· There was a change of target from implicit to explicit inflation targeting which aimed at about 4% inflationary rate and was able to bring success to the economy of Turkey

· Appreciating strong capital inflows, currency appreciation and undermining competitiveness of labour intensive sections, it has been able to bring effectiveness in stabilisation of the economy to a great extend

· The monetary policy history of India has been varying. With the adoption of globalisation in 1990’s the monetary framework has seen a considerable shift.

· With more private participation, there have been may instants where introduction of various government plans have affected the economy. The monetary policies have been able to resist those difficulties arising from similar fiscal measures

· Thus, on analysis, it can be seen that when the monetary framework was able to bring back the falling economy of turkey to a stable market, it was able to maintain a stabilised market throughout in the history of India.

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