The Asian Financial Crisis. Causes, Contagion and Consequences

Presents the first theoretical analysis of the Asian financial crisis and draws out the general lessons of an event whose potential long term effects have been likened to those of the Crash of 1929. Part I presents a factual and analytic overview of what happened: the role of 'vulnerability'; the interconnection between currency crises and financial crises; and why crisis turned into collapse. Part II considers more detailed issues, including how the inflation of non-traded goods prices created vulnerability, welfare-reducing capital inflow owing to under-regulated financial markets, and the onset of speculative attacks. Part III assesses all aspects of contagion, in particular the role of geographic proximity. The final section addresses policy issues. Joseph Stiglitz argues that there is much that can be done to reduce the frequency of crises and to mitigate the severity of crises when they happen. The book finishes with a round-table discussion of policy issues. • The first theoretical analysis of the major economic event since the Oil Crisis • An all-star intenational group of economists and saleable authors including Aghion, Stiglitz and Goodhart • Explains what policy lessons can be drawn so as to make crises less frequent and to reduce the severity of crises when they happen