The Asian Financial Crisis: Causes, Contagion and Consequences: 2 (Global Economic Institutions, Series Number 2)

Cambridge University Press, 11/4/1999
EAN 9780521770804, ISBN10: 0521770807

Hardcover, 448 pages, 22.9 x 15.2 x 2.9 cm
Language: English

Presents the first theoretical analysis of the Asian financial crisis and draws out the general lessons of an event whose potential long term effects have been likened to those of the Crash of 1929. Part I presents a factual and analytic overview of what happened: the role of 'vulnerability'; the interconnection between currency crises and financial crises; and why crisis turned into collapse. Part II considers more detailed issues, including how the inflation of non-traded goods prices created vulnerability, welfare-reducing capital inflow owing to under-regulated financial markets, and the onset of speculative attacks. Part III assesses all aspects of contagion, in particular the role of geographic proximity. The final section addresses policy issues. Joseph Stiglitz argues that there is much that can be done to reduce the frequency of crises and to mitigate the severity of crises when they happen. The book finishes with a round-table discussion of policy issues.

List of figures
List of tables
Preface
Acknowledgements
Introduction Pierre-Richard Agénor, Marcus Miller, David Vines and Axel A. Weber
Part I. General Accounts
1. The role of macroeconomic and financial sector linkages in East Asia's financial crisis Pedro Alba, Amar Bhattacharya, Stijn Claessens, Swati Ghosh and Leonardo Hernandez
Discussion Sule Ozler
2. The Asian crisis
lessons from the collapse of financial systems, exchange rates and macroeconomic policy Jenny Corbett and David Vines
Appendix
Thailand, a stylised chronology
Discussion Christopher Bliss
3. Are capital inflows to developing countries a vote for or against economic policy reforms? Michael P. Dooley
Discussion Kenneth Kletzer
4. The Asian crisis
an overview of the empirical evidence and policy debate Giancarlo Corsetti, Paolo Pesenti, and Nouriel Roubini
Appendix
Discussion Richard Portes
Part II. Theoretical Contributions
5. Capital markets and the instability of open economies Philippe Aghion, Philippe Bacchetta and Abhijit Banerjee
Appendix 1
solving the model in the Leontief case
Appendix 2
why full financial liberalisation - unlike foreign direct investment - may destabilise an emerging market economy
Discussion Gianluca Femminis
6. Volatility and the welfare costs of financial market integration Pierre-Richard Agénor and Joshua Aizenman
Discussion John Driffill
7. A theory of the onset of currency attacks Stephen Morris and Hyun Song Shin
Discussion Jonathan P. Thomas
Part III. Contagion
8. Contagion
monsoonal effects, spillovers and jumps between multiple equilibria Paul Masson
Discussion Axel A. Weber
9. Contagion and trade
why are currency crises regional? Reuven Glick and Andrew K. Rose
Appendix
Discussion Mark P. Taylor
10. Competition, complementarity and contagion in East Asia Ishac Diwan and Bernard Hoekman
Appendix
Discussion Jenny Corbett and David Vines
Part IV. Policy Responses
11. Coping with crises
is there a 'silver bullet'? Amar Bhattacharya and Marcus Miller
12. Must financial crises be this frequent and this painful? Joseph Stiglitz
13. Round table discussion Richard Portes, Phillip Turner and Charles A. Goodhart
Index.