Economic and Political Freedom as Determinants of the 1997-98 Financial Crisis

23 Pages Posted: 12 Nov 2001

Abstract

The recent east Asian crisis has lead to calls for a new international financial architecture. This paper investigates the crisis in terms of a "grabbing hand" theory of the state. Results indicate that those economies that chose not to have floating exchange rates and chose to have inconsistencies between economic freedom and political and civil freedoms were most affected by the crisis. This finding undermines any contagion arguments and consequently there is no basis for restructuring the financial architecture.

JEL Classification: D23, F02, H11, P16

Suggested Citation

Davidson, Sinclair, Economic and Political Freedom as Determinants of the 1997-98 Financial Crisis. Available at SSRN: https://ssrn.com/abstract=290228 or http://dx.doi.org/10.2139/ssrn.290228

Sinclair Davidson (Contact Author)

RMIT University ( email )

124 La Trobe Street
Melbourne, 3000
Australia

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