Short term capital movements in Turkey and effects on economic growth

Since the end of the 20. century, the increasing globalization wave has affected the economic domain. With the removal of the barriers before the capital movements, financial markets have become free. This liberalization process has also affected the capital movements. Going out of the country borders, capital flows thus turned to the markets providing high returns. In this, the rapid decline in the growth rate and the yield on capital has been influential. Developing countries suffering a lack of resources have in turn seeked to cover their deficits from countries with savings surplus. Over time, there have been changes in the structure of the capital movements and a speculative increase in the amount of the short term funds wishing to benefit from high interest rates between countries in the total of the capital flows. Developing countries with high interest rates want to attract these funds to their countries. But in the case of the reversal of these funds, it is likely be faced with high current account deficits and go through economic crises. In Turkey, since 1980?s, the effects of the short term capital inputs on the economy have come into prominence. In this study, the impacts of the short term capital flows on growth will be examined.