The election and expectations - AHMET ULUSOY

The election and expectations

Just as expectations keep our morale good or bad, they also influence our behavior.

The consolidation of these behaviors lead to economic decisions.

In other words, our behavior turns into consumption, saving, recreation, speculative anticipation, job search/resignation or investment.


If you constantly think your heart is aching, feeling pain in your chest a while later will become inevitable.

This is a psychosomatic ache.

Behaviorism plays an important role in economy as well.

If you think the dollar, interest and prices are going to increase and take position accordingly and if this becomes widespread, then your expectation will realize.


Economy philosophers have also developed some opinions/views on uncertainty and expectations to try and explain economic incidents.

Expectations influence the behaviors of the decision-making players (buyer, seller, commissioner, et cetera) in the market, impacting the determination of the value of parameters such as price, sales level, revenue, taxes, expenditure, currency exchange rate, interest, et cetera.

Uncertainty on the other hand triggers negative expectations.

The elections are one of the major factors increasing uncertainty.

Today, the consumer, investor, entrepreneur, among others have taken position according to the likely picture post elections and are waiting.


Economists have mulled over uncertainty and expectations, developed theories and carried out academic studies, put forward different views and produced serious arguments.

For instance, in saying that macroeconomic activities may fluctuate based on human motives, Keynes has said, a positive outlook to the future, or the positive investment climate in a country will, in a sense, have a positive affect on all economic variables.


Adaptive Expectations Theory Cagan, Friedman, Nerlove, et al. have proposed that people create expectations related to the future based on past economic values.

Rational Expectations Theory Muth, Lucas, Sargent, Wallace et al. have stated that people make consistent predictions related to the future and will not make continuous/systematic mistakes.

According to rational expectations, expectations related to economic values will realize if there is no uncertainty.


So, the uncertainty obstacle standing in the path of economic players needs to be removed.

From another aspect, in the event the results of the election lead to a new government crisis and uncertainty, this will kick start an extremely grueling period in terms of achieving the goals, level of welfare, high living standards set by the country.


The results of the June 7 elections started a period of uncertainty, which is not liked much by economy and markets, and has been ongoing for the last five months.

Yet we need to underline a fact: Despite having a caretaker government for the last five months, as a result of the strong organizational structure built in the past, the country's economy has been continuing on course without an economic crisis – even though some problems do exist.


The central banks of the U.S., Europe and Japan have stated that they will continue on with their loose money policy (low interest).

In other words, the foreign financial conjuncture is also giving an impression that will have a positive impact on our country's sourcing, financing of new investments and the development potential of real economy.


Economy does not withstand risk or uncertainty.

Exchange rates, interest rates and consumption decisions are dependent on expectations.

Investments, recruitment (job opportunities) and production are dependent on expectations.

Wealth, increase in welfare, economic growth are dependent on expectations.

The election results will affect the government, the government will affect expectations and expectations will directly affect all macroeconomic variables, our life, welfare and future.


We expect, after the elections, a strong government to emerge and Turkey to achieve its high growth rates once again after a short slowdown period, make its development move and step into a new era that will increase its welfare.


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