Turkey's economic experiment under Erdoğan

Turkish President Recep Tayyip Erdoğan's unconventional economic policies between 2021 and 2023 serve as a notable case study in macroeconomic defiance. Despite standard economic principles suggesting that high interest rates are necessary to combat soaring inflation, Erdoğan opted to lower the main interest rate from 19 percent to half its value.

This policy resulted in significant economic instability, including a 40 percent drop in the value of the Turkish lira and increased dollarization of the economy. The failure of this experiment eventually necessitated raising interest rates to 50 percent. The situation highlights the tension between political will and economic laws, particularly in nations facing high debt and state deficits.