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The Origin of the Asian Financial Turmoil

Author

Listed:
  • Morris Goldstein

    (Institute for International Economics)

  • John Hawkins

    (Reserve Bank of Australia)

Abstract

In the second half of 1997 many Asian emerging economies suffered large declines in both their currency and equity markets. This Asian financial turmoil arose primarily from three interrelated sets of factors, namely: shortcomings in the financial sector at a time when global liquidity conditions were accommodative, concerns about balance of payments developments, and contagion across economies. The major channel of contagion appears to have been the sudden realisation by the market – after the sharp depreciation of the Thai baht – that a number of other Asian economies had vulnerabilities similar to those in Thailand.

Suggested Citation

  • Morris Goldstein & John Hawkins, 1998. "The Origin of the Asian Financial Turmoil," RBA Research Discussion Papers rdp9805, Reserve Bank of Australia.
    • Handle: RePEc:rba:rbardp:rdp9805
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    File URL: https://www.rba.gov.au/publications/rdp/1998/pdf/rdp9805.pdf
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    References listed on IDEAS

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    Cited by:

    1. Ramkishen Rajan, 2010. "The Currency and Financial Crisis in Southeast Asia: A Case of 'Sudden Death' or Death Foretold'?," Working Papers id:2583, eSocialSciences.
    2. Demirguc, Asli & Detragiache, Enrica, 2000. "Monitoring Banking Sector Fragility: A Multivariate Logit Approach," The World Bank Economic Review, World Bank, vol. 14(2), pages 287-307, May.
    3. Robert Ewing & David Gruen & John Hawkins, 2005. "Forecasting the macro economy," Economic Roundup, The Treasury, Australian Government, issue 2, pages 11-25, June.
    4. Ramkishen S. Rajan, 1998. "The Japanese Economy and Economic Policy in Light of the East Asian Financial Crisis," Macroeconomics Working Papers 22382, East Asian Bureau of Economic Research.
    5. Demirguc-Kunt, Asli & Detragiache, Enrica, 1999. "Monitoring banking sector fragility : a multivariate logit approach with an application to the 1996-97 banking crises," Policy Research Working Paper Series 2085, The World Bank.
    6. Yu Hsing, 2004. "Impacts of flexible exchange rates and government debt on output," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 9(1), pages 1-9.
    7. Simone Bertoli & Giampiero Gallo & Giorgio Ricchiuti, 2010. "Exchange market pressure: some caveats in empirical applications," Applied Economics, Taylor & Francis Journals, vol. 42(19), pages 2435-2448.
    8. Ramkishen S. Rajan & Chang Li Lin, 2010. "Regional Responses To The Southeast Asian Economic Crisis: A Case Of Self-Help Or No Help?," Working Papers id:2685, eSocialSciences.
    9. Emerson Fernandes Marcal & Pedro Valls Pereira & Diogenes Manoel Leiva Martin & Wilson Toshiro Nakamura, 2011. "Evaluation of contagion or interdependence in the financial crises of Asia and Latin America, considering the macroeconomic fundamentals," Applied Economics, Taylor & Francis Journals, vol. 43(19), pages 2365-2379.
    10. Paolo Manasse & Luca Zavalloni, 2013. "Sovereign Contagion in Europe: Evidence from the CDS Market," Working Papers 471, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    11. Muge Adalet, 2009. "Were Universal Banks More Vulnerable to Banking Failures? Evidence From the 1931 German Banking Crisis," Koç University-TUSIAD Economic Research Forum Working Papers 0911, Koc University-TUSIAD Economic Research Forum.
    12. Mr. Mark S. Carlson & Mr. Leonardo Hernández, 2002. "Determinants and Repercussions of the Composition of Capital Inflows," IMF Working Papers 2002/086, International Monetary Fund.
    13. Mark A. Carlson & Leonardo Hernandez, 2002. "Determinants and repercussions of the composition of capital inflows," International Finance Discussion Papers 717, Board of Governors of the Federal Reserve System (U.S.).

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    More about this item

    Keywords

    Asia; exchange rates;

    JEL classification:

    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East

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