Abstract:

The reason that a persuasive answer to the causes of economic fluctuations and crises have not been produced in the mainstream literature is because of the fact that no claim has been made to the nature of the system in analysing the long history of crisis of capitalism covering the whole period from 1873 up to 2008. For the same reason in the mainstream theory of economics systemic fluctuations and swings could have not been foreseen, simply because the theory has neither penetrated nor laid a proper theory as to the structure and functioning of the system. Under this condition it is of great importance to put the financial structure prevalent in both the USA and the European economies to the forefront from a different perspective to get a clear vision of the 2008 criris that upsurged in the USA and had quite a detrimental effect in some European economies. Though the crisis has began in the financial sector in the USA which is the most developed economy in the world and has had spilled-over effects on some developed economies in the European Union it has had rather mild effect on the financial sector in Turkey, yet exerted quite a harmful effect on the real sector. As to the effects of the 2008 crisis on Turkish economy one needs to follow the trajectory of the economy throughout the period from the year 2000 onwards through which the IMF stabilization program has been strictly implemented .

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