Post-Crisis Shifts in Macroeconomic Management and Central Banking: Could Consumption Planning Emerge as a Macro-Prudential Tool?

Abstract

In this chapter, after a historical introduction of the trajectory encompassing a broader time horizon, we focus on the question of whether consumption planning could be conceived as a macro-prudential tool in the aftermath of the global crisis. In our theorizing, consumption planning is associated with a form of strategic planning in a highly globalized world where the state capacity in production is questioned due to reservations about its success in history while the state capacity in channelling the consumption across time and goods are relatively uncultivated. To this end, after explaining what we mean by consumption planning, the case of Turkey is explored with regard to the recent unconventional monetary policy experiences of the Turkish Central Bank and the succeeding macro-prudential policies in Turkey to channel the consumption across time and to a certain extent across goods to avoid financial stability anxieties stemming from widening current account deficit and escalating debt overhang led by overflowing of hot money to the emerging markets in the aftermath of the policy reactions of central banks of the developed countries.