Asian portents

[Doug Henwood]

[This looks like an effort to blame Asia rather than international 
capital markets for the crisis, but it's intriguing, following 
Krugman's analysis, how well the last sentence of the abstract 
applies to the U.S. today. Dunno why the indexers are just getting 
around to a Dec 98 paper, but who's counting?]

"What Caused the Asian Currency and Financial Crisis? Part I: A

  Macroeconomic Overview"

       BY:  GIANCARLO CORSETTI

               Yale University, Grad. School of Arts & Sciences

               Department of Economics

            PAOLO A. PESENTI

               Federal Reserve Bank of New York

               International Research Function

               Princeton University

            NOURIEL ROUBINI

               New York University

               Stern School of Business, Economics

               National Bureau of Economic Research (NBER)

Paper ID:  NBER Working Paper No. 6833

     Date:  December 1998

  Contact:  GIANCARLO CORSETTI

    Email:  Mailto:corsetti at econ.yale.edu

   Postal:  Yale University, Grad. School of Arts & Sciences

            Department of Economics

            37 Hillhouse

            New Haven, CT 06520  USA

    Phone:  (203)432-3568

  Co-Auth:  PAOLO A. PESENTI

    Email:  Mailto:Paolo.Pesenti at ny.frb.org

   Postal:  Federal Reserve Bank of New York

            International Research Function

            33 Liberty Street

            New York, NY 10045  USA

  Co-Auth:  NOURIEL ROUBINI

    Email:  Mailto:nroubini at stern.nyu.edu

   Postal:  New York University

            Stern School of Business, Economics

            44 West Fourth Street, 7-180

            New York, NY 10012  USA

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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.

JEL Classification: F31, F33, F34, F36, G15, G18