Chapter

Causes of the East Asian Crisis: Structural Weakness vs. Liquidity Panic View

Yung Chul Park

in Economic Liberalization and Integration in East Asia

Published in print December 2005 | ISBN: 9780199276776
Published online February 2006 | e-ISBN: 9780191603051 | DOI: http://dx.doi.org/10.1093/0199276773.003.0008
 Causes of the East Asian Crisis: Structural Weakness vs. Liquidity Panic View

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Critics and experts blamed structural weaknesses and misguided macroeconomic policies as the major causes of the 1997 financial crisis. These include financial sector frailties, weakness in the corporate and government sectors, a deteriorating external situation, and contagion. It is argued that neither the structural nor liquidity-panic view accounts for the causes and consequences of the crisis. East Asian countries had failed to reform and improve the efficiency of their financial and corporate sectors.

Keywords: total factor productivity; financial weakness; capital inflows; liquidity panic

Chapter.  3550 words. 

Subjects: Business and Management

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