Financial liberalization and functional distribution of income in Turkey

Liberalization phenomena is a doctrine which started at the end of the 1970s in developed countries, became widespread also in developing countries with the 1980s and defends opinion of minimization the government interference to the economy by letting the market economy flow.Financial liberalization period started in Turkey with 24th January 1980 Decisions. As a lower dimension of this process, financial liberalization came up to the fore and in this direction, this period, started with liberalising the interest rates between 1980-1989, was complemented with Dec. No. 32 of 1989 which liberalises all of the capital flows. These events had influence in a wide field at the economy ambidextrously and while Turkey was integrating into global finance system substantially the advantages and disadvantages of this was faced at the same time.Financial liberalization created effects not only on financial system and its indicators but also on real economy and on the distribution of income indirectly. But it is seen that this interaction has not been entreated by the investigations in Turkey. The aim of this study which has been prepared by taking into consideration this deficiency is to expose the effects of financial liberalization on functional distribution of income in Turkey and its impulse channels. In this context:In the first part of our study, theoretical dimensions of liberalization, financial liberalization and functional distribution of income concepts are discussed and also interaction between financial liberalization and functional distribution of income are exposed.In the second part of our study, liberalization applications implemented in economic terms in Turkey during the period from the foundation of the Republic to date are stressed detailedly.In the third part of our study, the effects of financial liberalization on functional distribution of income are analyzed with statistical datas. The study is finalised with the conclusions part which the evaluations are made in first three parts and gives part to the suggestions about policy preferences.