Bankers and Beliefs: The Political Psychology of the Asian Financial Crisis

Abstract

The Asian Financial Crisis is commonly dated to July of 1997, when the Thai central bank authorities, under relentless speculative pressure, allowed the baht to float freely. Most accounts of the crisis take the constitution of the crisis as a given and focus on either the structural economic conditions that “caused” it or on the outcomes that resulted from it. In this chapter I build on a small, but growing literature on constructivist international political economy (IPE) that no longer takes the global economy and its crises as a given. Instead, constructivist IPE examines the processes whereby features of the global economy, including its periodic crises, are constituted. The constitutive aspects of economic crises then enable us to further understand how key agents operating within these crises respond to mutually shared understandings about the causes of events and processes.