What Caused the Asian Currency and Financial Crisis? Part I: a Macroeconomic Overview

51 Pages Posted: 5 May 1999 Last revised: 11 Oct 2010

See all articles by Giancarlo Corsetti

Giancarlo Corsetti

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS); University of Rome III - Department of Economics; Centre for Economic Policy Research (CEPR)

Paolo A. Pesenti

Federal Reserve Bank of New York; National Bureau of Economic Research (NBER)

Nouriel Roubini

New York University - Leonard N. Stern School of Business - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: December 1998

Abstract

The paper explores the view that the Asian currency and financial crises in 1997 and 1998 reflected structural and policy distortions in the countries of the region, even if market overreaction and herding caused the plunge of exchange rates, asset prices, and economic activity to be more severe than warranted by the initial weak economic conditions. The first part of the paper provides an overview of economic fundamentals in Asia on the eve of the crisis, with emphasis on current account imbalances, quantity and quality of financial overlending,' banking problems, and composition, maturity and size of capital inflows.

Suggested Citation

Corsetti, Giancarlo and Pesenti, Paolo A. and Roubini, Nouriel, What Caused the Asian Currency and Financial Crisis? Part I: a Macroeconomic Overview (December 1998). NBER Working Paper No. w6833. Available at SSRN: https://ssrn.com/abstract=145249

Giancarlo Corsetti (Contact Author)

European University Institute - Robert Schuman Centre for Advanced Studies (RSCAS) ( email )

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University of Rome III - Department of Economics ( email )

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Paolo A. Pesenti

Federal Reserve Bank of New York ( email )

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Nouriel Roubini

New York University - Leonard N. Stern School of Business - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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