2002 Fiscal Year Final Research Report Summary
A STUDY OF INFLUENCE OF THE ASIAN CURRENCY AND ECONOMIC CRISIS ON THE INTERNATIONAL ECONOMIC ORDER
| Project/Area Number |
12630068
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
経済政策(含経済事情)
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| Research Institution | GRADUATE SCHOOL OF ECONOMICS, NAGOYA UNIVERSITY |
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Principal Investigator |
HIRAKAWA Hitoshi NAGOYA UNIVERSITY, GRADUATE SCHOOL OF ECONOMICS, PROFESSOR, 大学院・経済学研究科, 教授 (60199049)
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| Project Period (FY) |
2000 – 2002
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| Keywords | Excess liquidity of Capital / Free Trade Agreements (FTAs) / The International Monetary Fund (IMF) / The World Bank / Regionalism / ASEAN+3 |
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| Research Abstract |
The Thai currency, the Baht, started to depreciate drastically after July 1997, when the Thai government moved her exchange rate system from one pegged to the dollar to a floating rate system. The effect of this depreciation immediately spread to Southeast Asian and Northeast Asian economies. Indonesia and South Korea suffered currency crises within the same year. Just after the crisis took place, the Asian model of capitalism, including its internal organizations and systems, was focused on as a cause of the crisis. The Asian model was condemned as crony capitalism, because certain organizations and systems in the model were seen as distorting the market mechanism. As a result, the IMF, World Bank, and the United States Government forced structural reforms in those countries. However, the currency crisis was not a problem that affected Asia alone. In 1998, it spread to Russia and Latin America and seemed to presage a world crisis. That, in turn, changed the main understanding of the cause of the crisis.
Excess liquidity in the international financial system was regarded as a main cause, and lead to a discourse of how to manage excess liquidity. Yet the United States has never accepted the control of short-term capital mobility beyond national boundaries, believing that globalization would maximize world welfare.
However, Asian countries had to adopt their own measures to prevent the crisis, a main reason why regional cooperation has progressed since the crisis, in addition to the domestic economic reforms already enacted. The ASEAN + 3 summit meetings have been held yearly and free trade agreements and other arrangements have also been discussed. The crisis lead East Asia to regionalism, following that of Europe and America. The globalization of the world economy will be divided into three main areas, Europe, the Americas and Asia.
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