The East Asian financial crisis has raised a series of important issues. Amongst them is the question of the role of the banking sector and financial liberalisation in contributing to financial crises. How do weaknesses in the domestic banking sector, when combined with both domestic and...

In determining the maturity structure of bank loans in the presence of pre-determined short-term international liabilities, we show that maturity mismatches in banks’ balance sheets are fully consistent with the assumption of banks acting as self-interested, optimising agents. Although often...

Most analyses of the East Asian financial crisis have focused on its causes and the links between currency and banking crises. However a related question is what happens in the aftermath of a crisis? What factors determine the path of an economy in the post-devaluation phase? Does it swiftly...

Two features of East Asia’s recovery from the financial turmoil of 1997- 98 appear to be rather paradoxical. First, the regional economies (except Hong Kong, China and Malaysia) have allowed a relatively greater albeit modest degree of variability of their currencies according to market...

The dilemma facing policymakers is how to combine the instruments they have available in the form of fiscal, monetary and exchange rate policy to achieve the targets of internal and external balance. Shortly before the global economic and financial crisis in 2008 most economies appeared to be...

Why are some currency crises followed by economic contractions while others are not? This paper is an attempt at answering this query. In particular, we investigate two closely related questions. First, we explore whether there is a difference in the output effects of a devaluation during...

One of the more important concepts in open macroeconomics is the “equilibrium real exchange rate†(ERER). Real exchange rate misalignments are argued to have been the cause of loss of competitiveness and growth slowdowns and eventual currency crises (in the event of sustained...

Despite numerous empirical studies examining various facets of the topic, the degree of intraregional financial integration in East Asia remains a matter of vigorous debate. This paper offers a selective survey of the recent empirical literature on financial integration, the focus being on...

While talk of a 'China-India axis complete with 2.4 billion people' is no doubt fanciful, the progress in relations over the seven years following the nuclear crisis of 1998 is claiming the close attention of observers of world poliitics. Above and beyod their potential economic synergy, the...