Chapter 1 Introduction-hypotheses and research questions 1 Introduction 1 1.1. Background to the research 1 1.2. Research problem - hypotheses - research questions 2 1.3. Context of the study 3 1.4. Justification of research and Methodology 5 1.5. Outline of the book 8 1.6. Scope of the book 10 1.7. Definition: an additional 11th principle to the “Washington Consensus” 18 1.8. Delimitations of scope and assumptions 19 1.9. Conclusion 20 Chapter 2 Deregulation Process and Macroeconomic Stability 21 Introduction 21 2.1. Washington Consensus 21 2.2. First Phase from 1980 to 1988: Introducing the “Washington Consensus” principles 45 Concluding remarks 72 Chapter 3 Consequences of Deregulation in Turkish Financial Markets: Business Cycles and Financial Crises 75 Introduction 75 3.1. Review of Theories on Business Cycles 77 3.2. Currency Crisis Models 87 3.3. Cycles of Crises in Turkish Financial Markets 112 Conclusion 183 Chapter 4 Institutional Transformation 187 Introduction 187 4.1. Adapting EU requirements to Turkish conditions: a depoliticized regulatory framework in economic management 188 4.2. Regulatory Reforms on Privatizations, FDI and Property Rights 231 Conclusion 284 Chapter 5 Post-2002 Economic Performance 285 Introduction 285 5.1. Credit Ratings 287 5.2. Credit Default Swaps (CDSs) 308 5.3. Adopting EU-inspired standards and emerging problems 316 Conclusion 328 Chapter 6 Conclusion 341 6.1. Introduction 341 6.2. Conclusions about research questions and hypotheses 346 6.3. Implications of the Mundell-Fleming (M-F) model 357 6.4. Role of institutions: the political crises of February 2001 and April 2007, lessons to be learned 359 6.5. Concluding remarks and suggestions for further research 360 Annex 1 A Guide to Transition in Turkey 369 Annex 2 Hedge Funds 389 Annex 3 Governments formed in Turkey from 1961 to 2011 395 Annex 4 Supervising Privatized Natural Monopolies 401 Annex 5 Methodology of Rating Agencies 405 Annex 6 Calculating the probability of default from CDS Spreads 409 Bibliography 413 Papers 413 Texts 439 Articles in Texts 443 Official Documents 446 Web Sites 451 Articles on online journals 455 Index 457