The Asian Financial Crisis in Retrospect: What Happened? What Can We Conclude?
AbstractThis memorandum provides an overview of the Asian financial crisis of 1997-98. It reviews its evolution, causes, and consequences and examines the reaction by (inter)national policymakers. Macroeconomic indicators were deteriorating before the crisis, but it is debatable whether that alone can explain the severity and spread of the crisis. One group of observers have argued that the root of the crisis lies in fundamental economic weaknesses; others have claimed that East Asia fell prey to a sudden shift in investor confidence. The effects of the Asian crisis have not been limited to East Asia: the crisis has had farreaching consequences, particularly for some other emerging market economies. The advanced economies and China, in contrast, have weathered the crisis quite well. While the IMF has been criticised for its heavy-handed and intrusive response, recovery was fairly rapid in most cases. Yet, although the most-heavily affected countries have made progress with financial and corporate reforms, much remains to be done before this process is complete. Like the crises that preceded and followed the Asian financial crisis, the events in Asia demonstrate the need to strengthen the international financial architecture. Download PDF-file (302 Kbytes)
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Bibliographic InfoPaper provided by CPB Netherlands Bureau for Economic Policy Analysis in its series CPB Memorandum with number 87.
Date of creation: Mar 2004
Date of revision:
Find related papers by JEL classification:
- F30 - International Economics - - International Finance - - - General
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F33 - International Economics - - International Finance - - - International Monetary Arrangements and Institutions
- E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
- G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-11-22 (All new papers)
- NEP-HIS-2004-11-22 (Business, Economic & Financial History)
- NEP-IFN-2004-11-22 (International Finance)
- NEP-MAC-2004-11-22 (Macroeconomics)
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