Understanding Asia's Financial Crisis

by Barry Eichengreen, Clemens Lecture Series 10, 1998

Introduction

It is a mistake to think of Asia’s financial collapse as a single event. The causes and consequences differed across countries. New financial crises unfolded upon old ones; by the spring of 1998, the Managing Director of the International Monetary Fund (IMF), Michel Camdessus, routinely referred to “crises within crises.” To be sure, these difficulties were related. But attempting to explain them all by a single set of causes or to use them as turf on which to run a horse race between competing economic models is not helpful. Rather, the events in Asia suggest that understanding 21st-century crises will require weaving together strands from different models. Correspondingly, proposals for reform must address the problems highlighted by each of the relevant models.

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