Financial Crises: Plus ça change, plus cest la même chose
During recent decades most financial crises were caused by excessive public sector expansion. The current Asian crisis, however, had its roots in private sector over-expansion. In this respect it had more in common with the pre-1914 crises. In this paper we compare and contrast these two sets of financial crises. Many of their initial features - a toppling investment boom, widespread bank failures, financial dislocation and withdrawal of prior capital inflows - were common and prevalent in both eras. We focus here on the differences between the two cases and this centres on the external exchange rate regime. Prior to 1914, the regime encouraged large-scale gold inflows in the aftermath of crisis, a re-liquification of the economy and interest rates returning rapidly to low levels. Stabilising expectations are harder to encourage in current circumstances; in their absence the essential alternative is to reduce the burden of foreign debt.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alexander D. Noyes, 1909. "A Year After the Panic of 1907," The Quarterly Journal of Economics, Oxford University Press, vol. 23(2), pages 185-212.
- Miller, Victoria, 1996. "Exchange rate crises with domestic bank runs: evidence from the 1980s," Journal of International Money and Finance, Elsevier, vol. 15(4), pages 637-656, August.
- Milton Friedman & Anna J. Schwartz, 1963. "A Monetary History of the United States, 1867–1960," NBER Books, National Bureau of Economic Research, Inc, number frie63-1.
- Romer, Christina, 1986. "New Estimates of Prewar Gross National Product and Unemployment," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 341-352, June.
When requesting a correction, please mention this item's handle: RePEc:fmg:fmgsps:sp108. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (The FMG Administration)
If references are entirely missing, you can add them using this form.