How did Turkey turn 70% inflation into single digits? | Kamal Darvish made expectations the starting point of the reforms. The change in wage policy broke the cycle of inflation.
Kamal Darwish was an economist of Turkish origin who reached the position of Vice President of the World Bank. He himself says that at midnight Washington time, Bulent Ejwit, the Prime Minister of Turkey at the time, called him and asked him to return to Israel to help the Turkish economy. Darwish immediately resigned from the World Bank and went to Turkey to take charge of the country's economic affairs with extensive powers.
His credit and fame were so great that upon the announcement of his appointment, the Turkish stock market index rose by 7% and the lira strengthened against the dollar.
One of Darvish's most important steps was changing the salary adjustment mechanism according to inflation. In other words, the wage increase policy changed from a model of meeting the realized inflation of the past (backward indexing) to meeting the target inflation of the future (forward-looking indexing). | Ivanna
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