The Asian Economic Crisis of 1997 - 1998 .
The purpose of this paper is to identify and explore the causes of the 1997 and 1998 Asian economic crisis; and to research the effects of the crisis in each of the following categories: 1. The effects of the crisis in the countries involved in the economic crisis of 1997-98. 2. The effects on the governments affected by the crash, and 3. The effects that the Asian crisis has had on the differing world markets. The paper will first look at the causes behind the crash. The main factors include current-account imbalances, financial over-lending, banking problems, extremely open economies, and a list of other factors. Next, an analysis of how to avoid these problems in the future and what the repercussions will be in the Asian and Global markets will be discussed. The paper will be concluded with a look at preventative measures to insure that the Asian Crisis doesn't happen again.
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Many people were surprised as well as affected by the Asian economic crash of 1997. During that time, Asian economies had been following an economic model developed by the Japanese since World War II. The model used by Asian economies favored export markets, domestic investment, and lower savings vs. higher investment (current account imbalance) to list a few. (Issues and Controversies, 1998) This model saw strong, consistent growth in the GDP of the countries in the time that they used the model. Since 1960 the region's top performers---Japan, Hong Kong, South Korea, Singapore, Taiwan, Indonesia, Malaysia and Thailand---grew more than twice as fast as the rest of East Asia, three times as fast as Latin America and South Asia, and five times faster than sub-Saharan Africa. Average real income per person quadrupled in the five Northeast Asian countries and doubled among the three Southeast Asians.
