Financial Crises and Asia
Asset price volatility on world financial markets and foreign exchange markets has increased significantly since the Mexican peso crisis of December 1994. The Asian financial crisis is still underway, and there are clear signs that it too will leave significant costs in its wake. Though crisis avoidance is desirable, future financial crises will be unavoidable. The notion that emerging markets can sort out their own problems if left to their own devices is no longer plausible, and policy-makers cannot afford to adopt a laissez-faire attitude to this issue. The traditional IMF response is containment, designed to promote world financial and economic stability, but whether this is the best solution is debatable.
This is a report of a February 1998 CEPR conference that addressed these issues with particular emphasis on the important lessons that can be learnt from the recent events in Asia. The report contains an essay of the conference by Robert Chote, Economics Editor of the Financial Times, together with non-technical summaries of the papers presented.
'Fast clean and fun to read' (Charles Wyplosz, Graduate Institute of International Studies, Geneva)