10_8_Notes - Actually the crisis 2008 (sub-prime lending)...

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Econ 4730 F2008 (10/8/2008) Chapter 6, Wan (2004) and Article 12, Wan (2006) focus on Crisis 1997, which was sudden, ferocious and wide-ranging, because unpredicted and unpredictable changes in terms of trade can harm even economies that have registered unprecedented ratew of growth, should ostentation and ambition have made them indicted to short-term foreign debts which could be withdrawn over night. That crisis was not particularly East Asian, since there was no change of fortune for either Japan or China (one already in recession for some years and another with continued high growth) continued around that date.
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Unformatted text preview: Actually the crisis 2008 (sub-prime lending) has more similarities with crisis 2001 (dot.com crisis) than crisis 1997, in that the source of trouble comes from the United States, one of the chief market for the outward looking economies in the process of catching up. One might even question the desirability of an outward-looking policy stance. That of course is certainly going too far. Some degree of prudence in managing the macro-economy should suffice. This includes the keeping of a healthy balance of foreign exchange reserves in a basket of foreign assets, etc.w...
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