EFFECTS OF THE 2008 GLOBAL CRISIS ON THE TURKISH ECONOMY AND FISCAL POLICIES APPLIED TO PREVENT THE CRISIS

Periods of crisis are times when economic, social, and political problems occur, decisions are made for recovery, and efforts are made to resolve existing uncertainties. Politically, governments, especially during financial crises, face difficulties in governance and decision-making, occasionally leading to internal contradictions. Socially, an increase in unemployment during financial crises and a decrease in purchasing power due to implemented monetary and fiscal policies have led to a distrust of authorities within society. The 2008 global financial crisis, which originated in the U.S. housing market in 2007 and negatively impacted the entire U.S. financial system and subsequently other countries' economies, is considered the first global financial crisis of the 21st century and a prominent event in world financial history. To mitigate the adverse effects of the global crisis and revive their economies, countries resorted to monetary and fiscal policy measures. Initially, policies such as interest rate cuts and liquidity support were implemented. Later, counter-cyclical fiscal policy measures were introduced when it became evident that these measures were insufficient. In this study, the causes, consequences, effects of the 2008 global financial crisis, and its impact on the Turkish economy, along with the fiscal policies implemented in Turkey, are examined. Relevant literature from books, journals, theses, and online sources is utilized. The first part defines financial crises, explains types and models of financial crises, discusses past financial crises, and examines the causes of the 2008 global financial crisis, considered the largest financial crisis of the century. The second part explores the global impact of the crisis on the world and Turkish economies. The third part conceptually examines fiscal policies and their application in Turkey during the crisis period.