
Contents
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What sort of ‘Miracles’? What sort of ‘Miracles’?
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How did the ‘Meltdown’ happen? How did the ‘Meltdown’ happen?
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Early signs Early signs
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Speculation Speculation
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Why did it happen? Why did it happen?
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Export competitiveness Export competitiveness
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The economies were too closed (or too open) to foreign investment The economies were too closed (or too open) to foreign investment
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Too much borrowing Too much borrowing
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Just another financial crash Just another financial crash
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Responses Responses
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IMF IMF
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Lessons Lessons
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Notes Notes
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Cite
Abstract
The 1997/8 Asian crisis was severe for most of the region and the financial crisis had a deep impact on many real economies. This chapter shows that explanations for the crisis are many and varied, as are explanations for the ‘miracle years’; but there are some conclusions that can be safely made. First, the volume of funds involved in the currency and stock market crashes was large with respect to the size of the economies the funds were invested in. There were also large differences in economic performance in the region and while this did not affect the degree to which currency and stock speculation occurred, it did have an effect on the depth of the crisis and the speed of recovery. Thailand, Indonesia, and Korea were worst affected while the People's Republic of China and Taiwan were least badly hit. Finally, the international response to currency crises needs to be more sensitive to the nature and causes of economic problems and their social consequences. The measures described in the ‘letters of intent’ were not the best policies for the affected countries. In particular, they failed to deal with the question of inadequate domestic demand and included policies that made matters worse.
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