The Asian Crisis in 1997 and its Causes

Abstract

East Asian economies, with their unprecedented growth in investment and national income, were once considered to be models for other developing countries. The World Bank’s East Asian Miracle (1993), for example, lauded positive features and policies of the East Asian model. Optimism spread and East Asia attracted almost half of the total capital inflows to developing countries (nearly US$100 billion in 1996). It was hardly ever considered that East Asia might become embroiled in one of the worst financial crises in the post-war period.