Unformatted text preview: onetary transactions with no parallel in
physical output. Loss in competitiveness. Causes of Asia’s Crisis
Banks in Japan and Europe were glad to lend
overseas because of the domestic economic recession
and the high profit margins of Southeast Asia.
The long-standing economic boom and low interest
rates in the U.S. markets released a flood of funds
seeking higher yields in emerging markets.
Current account balance of some Southeast Asian
economies were getting worse since the emergence of
China. Asian Financial Crisis
Asian Financial Crisis: sudden and sharp economic
shock, currency attack in 1998.
The economic bubble collapsed.
Prolonged regional instability.
Rapid wealth depreciation (fall in asset price).
Lack in crisis-management strategies.
V-shape bounce-back in other Asian economies.
Exposure of structural weakness in economy.
“Post-Olympic syndrome” after 1997 (fall in
investment, demand and employment). Financial Crisis and Cost Deflation
Number of tourists decreased because...
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- Spring '14