The East Asian Crisis: Macroeconomic Developments and Policy Lessons
IMF Working Papers, September 1, 1998
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- The East Asian Crisis: Macroeconomic Developments and Policy Lessons
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Bibliographic details
- Authors: Kalpana Kochhar, Prakash Loungani, Mark R. Stone
- Published: September 1, 1998
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781451935547.001
Summary and core findings
- Reviews macroeconomic developments during the first year of the crisis in east Asia and draws preliminary policy lessons.
- Identifies root causes of the crisis:
- Interaction of large capital inflows and weak private and public sector governance.
- Documents surprising outcomes from macroeconomic adjustment in affected countries:
- Severe economic contractions
- Low inflation
- Rapid external adjustment
Lessons for crisis resolution
- Emphasizes policy actions during crises:
- Tight monetary policy early on for exchange rate stabilization
- Flexible fiscal policy
- Comprehensive structural reform
Crisis prevention and good-practice recommendations
- Crises are avoided by:
- Prudent macroeconomic policies
- Diligent bank supervision
- Transparent data dissemination
- Strong governance
- Forward-looking policymaking, even in good times
Subjects and keywords
- Subject: Commercial banks, Corporate sector, Economic sectors, Exchange rates, Export performance, Financial institutions, Financial sector, Financial services, Foreign exchange, Real interest rates
- Keywords: Commercial banks, Corporate sector, crisis country, East Asia, exchange rate depreciation, Exchange rates, financial market, Financial sector, Global, nominal exchange rate, private sector, Real interest rates, Thai baht, U.S. dollar, WP
Content in this bundle
- The East Asian Crisis: Macroeconomic Developments and Policy Lessons - WP/98/128