Thailand's Currency Crisis

Paper Summary:

This paper looks at the currency crisis in Thailand, which started in the summer of 1997 and rapidly engulfed a number of East Asian "Tiger economies" in a major financial crisis. This crisis became a an interesting case study for economists who were interested in analyzing the pros and cons of globalization and laissez faire market economies. The author further examines the effects of the East Asian currency crisis, on Thailand itself, which underwent a painful re-adjustment of its economy.

Outline:
Background
The Danger Signals
Foreign Exchange Reserves
Current Accounts Deficit
Excessive Credit Expansion
Why Did the Growth Slow Down?
The Housing and Real Estate Bubble
The Stock Market Bubble
The Crisis
The Aftermath of the Crisis for Thailand
Conclusion

From the Paper:

"The country took a number of measures to attract foreign capital during the 1980 and early 1990s. These included lifting of restrictions on foreign investments, elimination of most barriers on foreign ownership of export oriented industries, granting of tax incentives to foreign mutual funds and investments in the stock market, creation of closed-end mutual funds, and reduction of taxes on dividends remitted abroad (Antczak 40-41). These measures along with a pegged exchange rate policy (i.e., the Thai currency baht was pegged to the dollar and its value rose and fell with dollar's value), and the large differential in interest rates provided comfort to foreign investors who came to Thailand in droves. "

Sample of Sources Used:

• Antczak, Malgorzata. "The 1997 Currency Crisis in Thailand." Article in The Episodes of Currency Crisis in Latin American and Asian Economies. (ed. Marek Dabrowski), CASE Report, 2001. April 8, 2006. <http://www.case.com.pl/upload/publikacja_plik/RC39.pdf.> "Economic Overview." Country Watch: Thailand. 2005 update. April 8, 2006.
• Ito, Takatoshi. "The Development of the Thai Currency Crisis: A Chronological Review."
• Hitotsubashi University. 1998. April 8, 2006. <http://www.nber.org/~confer/99/thai99/thai1.pdf>
• Krugman, Paul. "The Myth of Asia's Miracle." A Cautionary Fable. 1994. April 8, 2006. <http://web.mit.edu/krugman/www/myth.html
• Lai, Quan B. "Currency Crisis in Thailand: The Leading Indicators." The Park Place Economist / vol. VIII. n.d. April 8, 2006. <http://titan.iwu.edu/~econ/ppe/2000/quan.pdf>

More papers on Thailand's Currency Crisis:

• Cause and Effect Essay # 110514 : "The Asian Currency Crisis"
• Essay # 43633 : "The South East Asian Currency Crisis"
• Research Paper # 8642 : "Asian Financial Crisis"

APA Citation:

MLA Citation: