IDEAS home Printed from https://ideas.repec.org/p/pas/papers/2007-06.html
   My bibliography  Save this paper

The Asian Crisis: a Perspective after Ten Years

Author

Listed:
  • W. Max Corden

    ()

Abstract

This paper presents a simplified overview of the causes of and policy responses to the East Asian financial crisis, focusing on the four principal countries involved, namely, Thailand, Indonesia, Malaysia and Korea. The main point is that there was a prolonged investment boom in these countries and an ending to the episode in the form of a 'hard landing' was neither inevitable nor predictable, but was set off by events in Thailand and reinforced in Indonesia’s case by political factors. There was a clear relationship between severity of the exchange rate crises and the short-term foreign borrowing that was denominated in foreign currency, usually dollars, and was unhedged. There were several policy responses, notably efforts to rescue the banks and various private corporations. Only in the Korean case was there a systematic attempt to get foreign creditors to reschedule the payments they were owed. There were some special features of each of our four countries. In particular, in Indonesia, there was an interaction of a political with an economic crisis, Malaysia did not incur significant short-term debts unlike the other three countries, while Thailand adhered too long to a fixed exchange rate.

Suggested Citation

  • W. Max Corden, 2007. "The Asian Crisis: a Perspective after Ten Years," Departmental Working Papers 2007-06, The Australian National University, Arndt-Corden Department of Economics.
  • Handle: RePEc:pas:papers:2007-06
    as

    Download full text from publisher

    File URL: https://crawford.anu.edu.au/acde/publications/publish/papers/wp2007/wp-econ-2007-06.pdf
    Download Restriction: no

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jiranyakul, Komain, 2011. "The Link between Output Growth and Output Volatility in Five Crisis-Affected Asian Countries," MPRA Paper 46068, University Library of Munich, Germany.

    More about this item

    Keywords

    Asian crisis; exchange rate policy; foreign capital; currency mismatch;

    JEL classification:

    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pas:papers:2007-06. 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: (Sandra Zec). General contact details of provider: http://edirc.repec.org/data/asanuau.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.