The Asia Crisis: Causes, Policy Responses, and Outcomes

Andrew Berg ()

No 1999/138, IMF Working Papers from International Monetary Fund

Abstract: This paper tells the story of the Asian financial crisis by addressing four questions: What were the causes of the crisis, how did the crisis unfold, what were the policy responses, and what have been the outcomes? The paper takes the view that none of these questions can be understood without appreciating the fundamental vulnerabilities that left authorities without effective tools to counter sudden capital outflows. The pattern of output decline suggests that these vulnerabilities, particularly weaknesses in domestic financial systems, played a larger role than tight monetary policy in determining outcomes.

Keywords: WP; crisis country; financial system; nominal interest rate; short-term debt; current account; Asia crisis; interest rates and exchange rates; currency crises; balance of payments crises; banking system; flight to quality; Exchange rates; Real exchange rates; Commercial banks; Asia and Pacific (search for similar items in EconPapers)
Pages: 62
Date: 1999-10-01
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Citations: View citations in EconPapers (51)

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