The Asian Crisis: The Economics Front
An International Conference

December 29-30, 1998, Seattle, Washington, U.S.A.

Introduction

The financial crisis that hit many Asian economies in the late 1990s shocked economists and government policymakers. It came as a surprise to many people, not only because of the large number of countries affected and the speed of the spreading crisis from one country to another, but also because of the fact that before the crisis many countries had been showing healthy signs: long periods of impressive growth rates, responsible government fiscal policies, and steady investment in human and physical capital.

Unfortunately, since July 1997, one country after another has been rocked by capital flight and speculative attacks; and many of them, except China and Hong Kong, had been forced to give up their policy of pegged exchange rates.

To find out what had happened and the effects of this crisis, a conference on "Asian Crisis: The Economics Front" was held on the campus of the University of Washington on 29-30 December 1998. Twenty-one papers were presented and discussed. The conference, which was jointly sponsored by City University of Hong Kong, Chinese University of Hong Kong, and University of Washington, provided a very good opportunity to the participants to exchange their views on the causes and effects of this crisis.

In the present issue we put together nine papers; another paper examining the crises in Hong Kong and Singapore and their exchange rate policies will appear in a later issue. All these papers were around the same theme, but were quite diversified. They provide different views on the nature, causes, and effects of the crisis, and they use different approaches, some with theoretical frameworks, some with empirical studies, some focusing on one or two economies, while others provide more general analyses. Many of these papers go beyond the crisis itself, and provide in-depth discussion of various parts of the economies before and after the crisis—such as the banking systems, the exchange rate regimes, and the fiscal and monetary policies in these economies.

List of Papers

Ngo Van Long and Huilan Tian, “Bailouts, Endogenous Financial Regimes, and Market Sentiments”

Koichi Hamada, “Economic Consequences of Pegging to the Dollar in a Multicurrency World”

Idanna Kaplan-Applo, “Estimating the Value of Implicit Government Guarantees to Thai Banks”

Valerie Cerra and Sweta Chaman Saxena, “Contagion, Monsoons, and Domestic Turmoil in Indonesia’s Currency Crisis”

Chung Yi Tse and Charles Ka Yui Leung, “Increasing Wealth and Increasing Instability: The Role of Collateral”

Jorge A. Chan-Lau and Zhaohui Chen, “A Theoretical Model of Financial Crisis”

Robert Dekle, Cheng Hsiao, and Siyan Wang, “High Interest Rates and Exchange Rate Stabilization in Korea, Malaysia, and Thailand: An Empirical Investigation of the Traditional and Revisionist Views”

Andre Cartapanis, Vincent Dropsy, and Sophie Mametz, “The Asian Currency Crises: Vulnerability, Contagion, or Unsustainability”

Taimur Baig and Ilan Goldfajn, “Monetary Policy in the Aftermath of Currency Crises: The Case of Asia”

Michael B. Devereux, “A Tale of Two Currencies: The Asian Crisis and the Exchange Rate Regimes of Hong Kong and Singapore” (to be published in a separate issue).

• the Asian Crisis home page

• another special issue on the Asian crisis, Japanese Economic Review, December 2001

• "Asian Crisis: the Economics Front" conference, Seattle, December 1998

• "Asian Crisis, II" conference, Seattle, January 2000

• "Asian Crisis, III" conference, Tokyo, July 2001

• "Asian Crisis, IV" conference, Taipei, July 2002.

• related conferences

• Kar-yiu's home page