The Asian Crisis 1997
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Looking at the genesis of the Asian crisis in 1997 and how this affected the world economy. What are the lessons that we can learn from this crisis?
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The Asian Crisis 1997
- 1. THE ASIAN CRISIS 1997 VENKATESH GANAPATHY
- 2. THE ASIAN CRISIS JULY 1997 – THAILAND : VALUE OF THAI BAHT PLUMMETED. SPILLOVER OF CRISIS – INDONESIA, KOREA, MALAYSIA, PHILLIPPINES CLOSURE OF BANKS AND FINANCIAL INSTITUTIONS COLLAPSE OF REAL ESTATE SECTOR
- 3. OTHER EFFECTS OF THE CRISIS INCREASE IN INTEREST RATES DEPRECIATION IN CURRENCIES REGIONAL STOCK MARKETS ADVERSELY AFFECTED
- 4. CAUSES OF THE CRISES 80’S – ASIAN ECONOMIES EXPERIENCING UNPRECEDENTED ECONOMIC GROWTH. RAPID RISE IN EXPORTS SHIFT IN EXPORTS FROM TEXTILES TO HIGH TECH PRODUCTS LIKE AUTOMOBILES, SEMI CONDUCTORS & CONSUMER ELECTRONICS. CYCLICAL DOWNTURN IN THE DEMAND FOR ELECTRONIC GOODS RISING DOLLAR, FALLING YEN FALL IN EXPORTS
- 5. IMPACT OF ASIAN CRISIS REDUCED INFLOW OF FOREIGN CAPITAL CURRENT ACCOUNT DEFICIT MARKET CONCERN ABOUT EXCHANGE RATES EVENTUAL COLLAPSE OF THAI BAHT NO IMPLICIT GUARANTEES IN INVESTMENTS FALL IN ASSET PRICES
- 6. CRISIS DEEPENS… FINANCIAL INTERMEDIARIES – BANKRUPT CRISIS SPREAD TO MALAYSIA, S KOREA, INDONESIA, PHILLIPINES. INVESTORS BACKED OUT RUSSIA AFFECTED [ RIPPLE EFFECT]
- 7. EFFECT OF ASIAN CRISES ON OTHER ECONOMIES JAPAN’S EXPORT TO ASIAN TIGERS WAS HIT LATIN AMERICAN COUNTRIES – CHILE, MEXICO, VENZEULA WERE ADVERSELY AFFECTED LOWER DEMAND FOR EXPORTS FROM LATIN AMERICA EUROPEAN FIRMS AFFECTED DUE TO REDUCED EXPORTS TO ASIAN COUNTRIES IMPORTS FROM ASIAN COUNTRIES INCREASED INSTEAD OF EUROPE
- 8. HOW BUSINESSES WERE AFFECTED BY ASIAN CRISES American firms – 3M, Motorola, HP and Nike experienced a fall in stock values European banks had provided huge loans to Asian companies and when these companies defaulted on these loans, the banks were affected.
- 9. HOW DID RECOVERY HAPPEN? MACRO ECONOMIC POLICY RESPONSES STRINGENT FISCAL & MONETARY MEASURES STRUCTURAL REFORMS INTERVENTION BY IMF
- 10. MORAL OF THE STORY STRICTER FISCAL DISCIPLINE IS A MUST.