Asian Financial Crisis

1. General Impact of Economic Crisis
General impact of economic crisis could be summed as widening gap between the haves and have nots. The major victims are those who are living on their working income. The benefited are those who are living on their finance interest and stock speculation. Small or middles sized manufacturing sectors doomed to be bankrupted because of shortage of capital, and high interest rate. Under the turmoil of crisis, the poor became the poorer, and the rich became the richer. Read the rest of this entry »

by: Markus Diehl and Rainer Schweickert

International investors’ enthusiasm with respect to growth prospects in Southeast Asia has been followed by panic. Both the outstanding economic performance of Southeast Asian economies and their ability to master adjustment challenges had led most observers of these economies to the conclusion that “Asia is different”. In comparison with previous currency crises, the macroeconomic fundamentals (GDP growth, inflation, fiscal deficit, external indebtedness, domestic savings, export performance) in the Southeast Asian economies seemed to be consistent with the fixed or quasi-fixed exchange rate regimes. Read the rest of this entry »