The devaluation of the Turkish lira in 2001 is one of the most significant events in recent Turkish economic history. It triggered many important changes in the central bank, including its independence, the implementation of an inflation-targetting regime, as well as bringing a new governor to the bank. Could you explain briefly why it happened and what the central bank has learnt from the experience?
Well, it is a complicated issue! One of my colleagues and I wrote a paper1 on the crisis and we