Economic turmoil in Asia: a reinterpretation
- 1999
- p.2071-080
- 24 Jul
Most analyses of the recent south-east Asian crisis focus on non-performing fundamentals or on self-fulfilling panics in the financial sector. This article traces the crisis to real sector deceleration, which was apparent a year before the crisis; and to the built-in instabilities in the deregulated financial system. As credit flows continued in spite of real sector slow-down, the system became vulnerable to sudden collapse in asset prices. Corrective measures by monetary authorities failed in deregulated financial markets. - Reproduced