Financial deregulation and capital-account liberalization preceded speculative currency attacks in Thailand. A combination of de facto fixed exchange rates and high rates of interest generated excessive capital inflows, which led to too much liquidity chasing bad investments. The...

Editor's Note: This is an edited transcription of the general session of the January 1998 Pacific Rim Allied Economic Organizations 3rd Biennial Conference, held in Bangkok, Thailand. Copyright 1998 Western Economic Association International.