Author: Padma Desai
Publisher: Oxford University Press
Year: 2004
Language: English
Pages: 303
ISBN/UPC (if available): 0195667735
Description
This book provides a sweeping, up-to-date, and boldly critical account of the financial crises that rocked East Asia and other parts of the world beginning with the collapse of the Thai baht in 1997. Retracing the story of Asia’s Crisis Five-Indonesia, Malaysia, South Korea, the Philippines, and Thailand-Padma Desai argues that the region’s imprudently fast-paced opening to the free flow of capital was pushed by determined advocates, official and private, in the global economy’s US-led developed center.
Turmoil ensured in these peripheral economies, the Russian ruble faltered, and Brazil was eventually hit. The inequitable center-periphery relationship also extended to the policy measures that the crisis-swept economies implemented under International Monetary Fund bailouts, which intensified the downturns induced by the panic-driven outflows of short-term capital.
Financial Crisis, Contagion, and Containment examines crisis origin and resolution in a comparative perspective by combing empirical evidence from the most robust economies to the least. Why is the US relatively successful at weathering economic ups and downs? Why is Japan stuck in policy paralysis? Why is the European Central Bank unable to achieve both inflation control and stable growth? How can emerging markets avoid turbulence amid free-flowing speculative capital from private lenders of the developed center?
Engaging and non-technical yet deeply insightful, this book appears at a time when the continuing turmoil in Argentina has revived policy debates for avoiding and addressing financial crises in emerging market economies.
REVIEWS
Padma Desai attacks head-on, fundamental questions about the compatibility of small emerging country economies with inherently volatile global financial markets-questions that have too often been ignored or glossed over in the policy debate.
-Paul Volcker, former Chairman of the US Federal Reserve
The best book yet about the financial crises that have swept the world in recent years; Desai offers a comprehensive, critical survey that will unsettle ideologues right and left.
-Paul Krugman, Professor of Economics and International Affairs, Princeton University
Padma Desai’s thorough and insightful analysis of the financial crises that have devastated many emerging market economies is essential reading for anyone seeking to understand the downside of the global financial system. Her forceful policy recommendations deserve to be considered at the highest level.
-George Soros, Chairman, Soros Fund Management
Padma Desai’s stimulating and path-breaking comparative analysis of the pace and sequencing of financial liberalization processes has profound implications for the planning of national policies and the structure of international financial cooperation.
-Manmohan Singh, former Finance Minister, India
Contents
Preface
Introduction
The U S Economy in Transition
The Euro: Teething Troubles and Faltering Responses
Japan: The Lost Decade of the Nineties amidst Policy
The Asian Financial Crisis
BLOCKS
What Are Fundamentals? What Are Structural Issues?
The Current Account and the Exchange Rate
Financial Liberalization, Capital Account Decontrol, and the Regulatory Framework
The East Asian Crisis: A Crisis of Over-Investment or Unregulated, premature Capital Flows?
The Asian Crisis Chronology
The Ruble Collapses in August 1998
BLOCKS
The Ruble: Premature Capital Account Convertibility
Contagion from the Ruble to the Real
Beyond Bangkok: Crisis Erupts in Buenos Aires and in the Bosphorus
The Contagion
International Monetary Fund to the Rescue: How Did It Fare? Badly
BLOCKS
Was There Moral Hazard in the Asian Financial Crisis?
How Much Corruption? Does Corruption Matter?
Chilean Capital Inflow Tax
Capital Account Convertibility in China and India: A Cautionary Tale of Two Countries
Crisis Prevention and Containment: The Next Steps in Financial Reform
References
Index