Download (28Mb) - LSE Theses Online

however, Chapter 5 concentrates on the short run, how was confidence reestablished
and how successfully, while earlier chapters (2 & 4) map out longer
term trends.
The implementation of a Keynesian, déficit financed policy, designed to restore
confidence and exploit the income multiplier, could have been employed across the
island as a whole by the sepárate and distinct de facto administrations. If so, was
this policy or necessity, politics or economics? Keynesian demand management is
something of a concomitant of war. There appears to have been a key role to be
played by the public sector in re-establishing a full-employment equilibrium, reestablishing
perceived key sectors formerly dominated by the prívate sector and
thereby establishing more general economic confidence. However, whilst elements
of a Keynesian approach could be applied to developments north and south, policies
adopted by the Cypriots always partly conformed to older classical concepts, like
comparative advantage. Moreover, there was an explicit shift in official Turkish-
Cypriot attitudes along with attitudes elsewhere, away from the oíd macro economic
orthodoxy. Following political changes in Turkey, northern Cyprus attempted a
quasi-privatisation strategy, one that was contemporary with the earliest, tentative
experiments further west.
Chapter 6 examines the possibility of determining a dynamic model to estimate the
economic costs to the island as a whole of its de facto división into two noncommunicating
parts. In the light of various static estimates of the costs to each
28