The Road to Sustainable Growth in Emerging Markets: The Role of Structural and Monetary Policies in Turkey

Abstract

The last decade witnessed an unprecedented economic growth in Emerging Market Economies (EMEs).EMEs have also been the main drivers of growth in the recovery following the global financial crisis.Nevertheless, EMEs continue to face a number of institutional and structural challenges that may pose risks to the sustainability of their recent growth performance, with potentially significant repercussions for the world economy. In this paper, we present a detailed account of Turkey's experience in dealing with various institutional and structural challenges during the last decade and provide evidence that taking the right steps can enable EMEs materialize their full growth potential going forward. Successful institutional and structural reforms can also provide room for monetary policymakers to effectively navigate their economies through turbulent times such as the recent global financial crisis. has been tremendous progress in several emerging market economies along both dimensions in the recent decades, with desirable outcomes. Nevertheless, the emerging market economies have still a long way to go in ensuring that the recent progress can be carried into the future. In particular, the ability of the emerging market economies to sustain the high levels of growth rates they have attained in the recent past is closely linked with their ability to deal ably with the abovementioned institutional and structural challenges.Source: Bloomberg.