Why was the crisis so severe (and not, for example, a relatively mild correction)?
Were the crisis economies, Indonesia in particular, ‘accidents waiting to happen’?
Why was it so unexpected, by markets, international agencies, and academic specialists?
Why was Indonesia so much worse than the other countries?
How should blame be apportioned among external and domestic factors, and among technical economic/financial factors and broader political and social variables?
The major argument in this section is that it was the conjunction of many factors which caused the crisis: political, social and economic; longer term and structural, and immediate and short-term; and domestic and international. It is also necessary — though empirically not easy — to distinguish between the factors leading up to the crisis, and the government’s management of it.
KeywordsExchange Rate Monetary Policy Mobile Capital External Debt Capital Account
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