East Asia in the Aftermath : Was there a Crunch?

Author/Editor:

Atish R. Ghosh ; Swart R. Ghosh

Publication Date:

March 1, 1999

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper uses a disequilibrium framework to investigate a possible credit crunch in the East Asian crisis countries (Indonesia, Korea, and Thailand) during 1997-98. It defines a credit crunch as a situation in which interest rates do not equilibrate supply and demand for credit and the aggregate amount is supply constrained, i.e. there is quantity rationing. In all three countries, rising real interest rates and weakening economic activity lowered credit demand and (with the exception of Indonesia in late 1997) there is little evidence of quantity rationing at the aggregate level—although individual firms may have lost access to credit.

Series:

Working Paper No. 99/38

Subject:

English

Publication Date:

March 1, 1999

ISBN/ISSN:

9781451845679/1018-5941

Stock No:

WPIEA0381999

Format:

Paper

Pages:

21

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