The causes for the instability that has marked the financial system over past decade lie deep-in the economic theory that urges easy and efficient substitution of one piece of paper for another, in the technology-driven tight articulation of receipts and payments, and in the growth of leverage...

Asia presents a cumulation of apparently rational decisions that produced disastrous results- a textbook illustration of "financial instability" developing from the economics of euphoria. A combination of factors produced the crisis as enormous capital inflows were drawn to the "Asian...