Asia’s Financial Blues: The End of POLIS?

Abstract

The East Asian financial crisis was by all accounts the most significant event in the world economy in 1997. The topic dominated the headlines, attracted the attention of the world and generated much despairing rhetoric. The economists naturally joined the cacophony of condemnations. The dismal science had never looked so dismal since the great depression of the 1930s. Without doubt, the speed and depth of the collapse of financial markets in East Asia caught everyone by surprise. Neither the existing surveillance mechanisms nor markets warned the euphoric investors adequately of impending calamity. The reversal of fortunes in East Asia came suddenly and surprised even the experts. The contagion spread rapidly, engulfing a number of economies in quick succession. It started as a currency crisis, then became a financial crisis. By 1998 it had become a full-blown economic crisis.