From ‘Miracle’ to ‘Cronyism’: Explaining the Great Asian Slump
Author(s)
Wade, Robert Hunter
Abstract
Was the Asian Slump caused by the build up of vulnerabilities in the real economy, with panicky investor pullout as merely the trigger or messenger of a necessary market correction? Or was it caused largely by the normal workings of under-regulated national and international financial markets, the panicky pullout itself being a prime cause? The short answer is, some of both. The paper describes the double helix-like interaction of real and financial causes. It then outlines a strategy of escape from crisis, including the reintroduction of capital controls and creation of an Asian Financial Facility.
