Paper Summary:

This paper examines the Asian Financial crisis of 1997 and explores some of its causes. Using Korea as an example, the writer shows how the policies of the IMF made the economic situation worse. The paper also looks at structural factors, reviews the inherent irrationality of investors, and explains the role of capital control regulations (or initial lack thereof) in producing the crisis - or at least deepening it. The paper concludes with recommendations on how to prevent a repeat of the crisis. The writer suggests that the IMF must allow developing nations to take matters into their own hands when looking at structural issues - and those countries must develop comprehensive oversight and "firewalls" that reduce cronyism and incompetence.

From the Paper:

"The following paper will look at the Asian Financial crisis of 1997 and explore some of the problems that clearly made this unfortunate event possible. Specifically, in addition to examining the causes of the catastrophe, this paper will look at the role of the IMF and how its policies and oversights made problems worse in Southeast Asia - with Korea being used extensively as an example. From there, the paper will look briefly at the role of "crony capitalism" in Southeast Asia; again, because of the spatial constraints, two nations in particular - Malaysia and Thailand - will be examined."

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