The Origin of the Asian Financial Turmoil

Morris Goldstein and John Hawkins

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: In the second half of 1997 many Asian emerging economies suffered large declines in both their currency and equity markets. This Asian financial turmoil arose primarily from three interrelated sets of factors, namely: shortcomings in the financial sector at a time when global liquidity conditions were accommodative, concerns about balance of payments developments, and contagion across economies. The major channel of contagion appears to have been the sudden realisation by the market – after the sharp depreciation of the Thai baht – that a number of other Asian economies had vulnerabilities similar to those in Thailand.

Keywords: Asia; exchange rates (search for similar items in EconPapers)
JEL-codes: F31 N25 (search for similar items in EconPapers)
Date: 1998-05
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Citations: View citations in EconPapers (16)

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