Professor Dr. Aybar: Corona virus loses credibility of neo-liberalism


The coronavirus (COVID-19) epidemic, which emerged in Wuhan, China and spread to almost all over the world, started to threaten the world economy. Finally, while the total number of cases rapidly approached 400 thousand, the number of people who died due to the virus exceeded 16 thousand.


It is considered as an inevitable situation that such an epidemic will also have a negative impact on the global economy. So far, about 28 trillion dollars into the world economy of the epidemic causing loss to the world and Turkey’s economy and will be evaluating the effects of Istanbul Aydın University Faculty of Economics and Administrative Sciences Department Chair Professor of Economics and Finance Dr. Ahmet Sedat Aybar pointed out that each country presents its own incentive package and said, “The first effect of the epidemic on economics was in the field of intellectual fiction. States have introduced economic packages suitable for their historical social conditions to overcome the narrowing effect of COVID-19. They formulated their package of measures for COVID-19 to suit their national capacities, including the European Union member states, which are the most extreme point of economic integration. For this reason, the unique neo-liberal approach, which is suitable for everyone, has no historical and place, has lost credibility due to the variety of incentive packages implemented by countries. ”

Professor Dr. Aybar: Corona virus loses credibility of neo-liberalism


class = ‘cf’>Reminding that the USA has implemented emission volume expansion through monetary regulations in this process. Dr. Aybar said, “Interest rates were dramatically lowered by the Federal Reserve (FED), which we can call the Federal Reserve (FED), as a result of extraordinary meetings, and it was decided to distribute a thousand dollars check to consumers. It was acted with the belief that the two trillion dollar incentive package would make the US economy resistant to the negative economic effects of the epidemic. ” Reminding that France protects the corporate sector with tax policies, and that it brings employment protection measures to the working segments. Dr. Aybar said, “The UK has launched the implementation of direct protective intervention in the employment-oriented economic policy in the labor market. He announced that he had allocated over 300 billion pounds for this. Countries such as Germany, Italy and Spain have shown that they will resist the crisis with some institutional arrangements in line with their conditions through tax and credit mechanisms ”.

Reminding that China has implemented similar regulations just at the beginning of the epidemic. Dr. Aybar said, “China tried to eliminate the negative effects on simultaneous demand and supply front, by reducing tax rates, delays in loan repayments and decreasing interest rates, especially in the sectors that were affected the most. Then international institutions started to explain their expectations on the duration of the crisis and the development dynamics, especially the IMF and the World Bank. While the IMF announced the expectation that the economic effects of the crisis will not be long-term, the OECD published the forecast that a longer-term contraction is expected. The IMF announced a $ 1 trillion package to support global liquidity. The contraction in the production chains stemming from the global demand front brought down the stock markets, adversely affected profitability expectations and the downward movement of commodity prices. “The decline in the price of barrels of crude oil to $ 20 is important not only in terms of geopolitical results but also in determining the time of establishment of the global economic balance,” he said.

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Underlining that all of these measures taken aim to remove borrower countries, which were adversely affected by the 2008 global economic crisis, by borrowing more from this crisis. Dr. Aybar said, “After the 2008 crisis, the world economy, which has not yet fully recovered, and these debtor countries are indebted to go through this process. This will be reflected in 2021 and beyond. They want to keep the production line, which has come to a standstill, by relieving the cash flow and liquidity needs of the corporate sector. At the same time, they are loosening their credit mechanisms and choosing the way of relieving consumer payments with their tax and deferral policies ”.


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He argued that the variety of measures implemented during the epidemic crisis may lead to the failure of the neo-liberal system in its current form. Dr. Aybar said, “The differences in the impact of the crisis, the diversity of measures taken, the different economic policy practices, the depth of state intervention will disable the neo-liberal model as the maintainer of global economic developments in the future. Alternative methods of struggle, developed in response to economic contraction, will be the area of ​​contention of rival economic thought systems. ”


Covidien-19 outbreak of assessing the effects on Turkey’s economy, Prof. Dr. Aybar, outbreaks that come with a certain delay to Turkey and the spread of progress with dissemination while still reminding remains unclear, “measures that Turkey has taken against the epidemic’s economic impact so ‘cautious’ form can be named. We see that the package of 100 billion pounds of measures announced by President Erdoğan focused on the supply side of the economy and that this front was built on not to blow too much. Now, in addition to this package, some regulations were introduced for the demand front. Of course, all these arrangements will be reconsidered according to the course of the outbreak. ”

The contraction caused by the epidemic, Turkey is less than expected could adversely affect the transfer Prof. Dr. Aybar, “But the world is experienced throughout the global recession caused outbreaks may also adversely affect Turkey once. Further contraction package of measures taken to Turkey expected to developments in overseas markets will respond, taking into account economic policies should also activate. On the other hand, because of the outbreak of the IMF and Turkey will not enter into question the possibility of working with international economic organizations such as the World Bank, “he said.


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