The Asian Financial Crisis in Retrospect: What Happened? What Can We Conclude?

Wink Joosten

No 87, CPB Memorandum from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: This 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)

JEL-codes: E65 F30 F31 F32 F33 G15 O53 (search for similar items in EconPapers)
Date: 2004-03
New Economics Papers: this item is included in nep-fin, nep-his, nep-ifn and nep-mac
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