The Asian Financial Crisis: Causes, Cures, and Systemic Implications

Policy Analyses in International Economics 55
by Morris Goldstein
June 1998
Book Description

The turmoil that rocked Asian markets after the middle of 1997 and that spread far afield was the third major currency crisis of the 1990s. Thailand, Indonesia, Malaysia, and South Korea suffered outright recessions in 1998. In an effort to contain the crisis, almost $120 billion was pledged in IMF-led official rescue packages.

How could this happen to a group of countries that has been so highly regarded in the 1990's by private international capital markets? How could the crisis be overcome, and what changes are necessary to prevent it from happening again? Morris Goldstein provides the answers to these questions by first explaining how the Asian financial crisis arose and spread. He traces the crisis through its three interrelated origins: financial sector weaknesses; external sector problems; and the contagion that spread from Thailand to other countries. Goldstein then outlines what needed to be done in the ASEAN-4 economies, in Japan and China, and in the design of IMF-led official rescue packages to end the crisis. Goldstein's final remarks offer specific proposals for improving the international financial architecture.

Chapters are provided for preview only.



1. Introduction [pdf]

2. Origins of the Crisis [pdf]

3. How to Fix it [pdf]

4. Halifax II Reforms [pdf]

5. Lessons of the Asian Crisis and Concluding Remarks [pdf]

Appendix [pdf]


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Book Data

June 1998
ISBN paper 0-88132-261-x | 978-0-88132-261-3
100 pp.

Commentaries on This Book

"A first rate piece of work ... an excellent and comprehensive discussion of why the Asian crisis occurred and what would be the appropriate policy responses."

Frederic S. Mishkin
A. Barton Hepburn Professor of Economics
Graduate School of Business
Columbia University

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