Bubbles, Monetary Management and the Asian Currency Crisis

Raul Fabella

Philippine Review of Economics, 1998, vol. 35, issue 2, 208-221

Abstract: We propose a life cycle of bubbles (from a quiescent stable state to a bubble to its collapse) where the role of monetary management is crucial. We claim that the policy of liberalizing short-term capital and private foreign borrowing (which was in effect a non-inflationary expansionary monetary policy with stable (pegged) exchange rates) combined to precipitate and deepen the Asean bubbles and create unsustainable short- and unhedged forex exposures.

Date: 1998
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Persistent link: https://EconPapers.repec.org/RePEc:phs:prejrn:v:35:y:1998:i:2:p:208-221

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