The Latin American and Asian Financial Crises: Contagion of Causes and Costs

Ricardo Ffrench-Davis

Chapter VII in Reforming Latin America’s Economies, 2005, pp 169-195 from Palgrave Macmillan

Abstract: Abstract Latin America’s macroeconomy has been strongly affected by changes in capital flows over the last three decades. During the 1970s, a large supply of funds was made available to the region; then, during the 1980s, there was a severe and widespread shortage of financing, and the region became a net exporter of funds. Between 1991 and 1994, it became a net recipient of large capital flows again, only to experience another sharp reduction of some of the main inflows in late 1994 and early 1995, and a renewed access in 1996–97. Since 1998–99, Latin America (LACs) experienced a new shortage of external financing. A crisis centered in Asian countries was now the origin of this new recessive macroeconomic adjustment in the region. When closing this typescript, in early 2005, a new significant recovery of economic activity was at work. In 2004, LACs exhibited the larger GDP growth since the previous peak year 1997. Interestingly, in this occasion, recovery was not led by inflows but by a sharp improvement in export volumes and prices. On all these swings, the changes that were first expansive and then contractionary, began on the international markets and had a strong impact on the national economies. In the times of the Latin American debt crisis of the 1980s and the Tequila crisis of 1994–95, the successful emerging economies of Asia — with the exception of the Philippines — appeared to be immune to the instability associated with capital surges.

Keywords: Exchange Rate; Current Account; Real Exchange Rate; Capital Inflow; Capital Account (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-0-230-50990-0_7

Ordering information: This item can be ordered from
http://www.palgrave.com/9780230509900

DOI: 10.1057/9780230509900_7

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().