At the outset of the 1997 financial crisis in East Asia, the quest to find a more suitable exchange rate policy has become an urgent policy challenge facing the East Asian economies. One of key policies agreed under ThailandÂ’s August 1997 Letter of Intent (LOI) with the IMF was to adopt a...

Despite the large number of studies done on the recent East Asian crisis, hardly any of them has however simultaneously evaluated the roots of the inflationary pressures and unearthed the sources of sharp variations between the inflation rates of the various crisis-effected economies. To help...

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...