authors
Antony D Miller

abstract
This paper critically examines the precipitous economic decline in Turkey, focusing on the interwoven factors of an unprecedented housing crisis, rampant inflation, and a significant exodus of skilled professionals. It delves into the idiosyncratic monetary policies adopted by the Turkish government, particularly President Erdoğan's unconventional economic theories, which have directly contributed to the current macroeconomic instability and widespread social distress. This analysis will explore how these policies, divergent from conventional macroeconomic wisdom, have exacerbated challenges for Turkish citizens, leading to a diminished quality of life and outward migration of its most talented individuals. The paper will further scrutinise the genesis of these policies by tracing back to the early 2000s, when Recep Tayyip Erdoğan and his Justice and Development Party secured a significant electoral victory in 2002. This victory marked the beginning of a transformative era for Turkey, initially characterized by economic growth and political stability, laying the groundwork for the future trajectory of the nation's economic policies. Initially, improvements in fiscal discipline, financial stability, and single-digit inflation fostered sustained economic growth, significantly reducing poverty and income inequality. However, this period of prosperity began to unravel as the government increasingly deviated from conventional monetary policy, driven by a belief that higher interest rates fuel inflation rather than curb it. This unconventional approach led to a sustained divergence between policy rates and actual lending rates, a gap further widened by significant currency depreciation, thereby increasing borrowing costs for both banks and businesses (Mammadov, 2025) ^[68]. This situation was further complicated by a credit-fuelled boom that ultimately led to speculative attacks on the Turkish lira in August 2018, causing a substantial currency crisis as Takinsoy described in 2019. The results show that Turkey under President Erdoğan, has consistently opted for unconventional monetary strategies, such as maintaining low interest rates even amidst soaring inflation, a policy directly contradicting established macroeconomic principles and leading to significant economic volatility.