A Macroeconomic Crisis That Occurred during the Period 1900-2005 - Research Proposal Example

A Macroeconomic Crisis that Occurred During the Period 1900-2005 (The Asian Currency Crisis) Introduction From a brief period of economic boom, Asiawitnessed a financial crisis in 1997. Asia is far removed geographically from most of the developed world. Nevertheless, the Asian financial crisis took down with it many of the successful economies of the developed world. There may be arguments that the Asian financial crisis resulted solely from the flawed process of liberalization, while others may point to a currency crisis and the cross currents of the currency crisis promoting the financial crisis.

However, there is general agreement that the interaction between macro-economic policies, the domestic financial sector and corporate governance within the Asian countries make them vulnerable to a financial crisis. (1). Rationale Most of the Asian economies have weathered the recent economic crisis through either the strength of their domestic demand in countries like India, the Philippines, Indonesia, and Vietnam or through the use of healthy fiscal resources to support exports in countries like China.

This good showing of economies in Asia is what holds promise for quickening the pace of the slow recovery in the developed nations. (2). The success of the Asian economies thus becomes crucial for the speedy recovery of the developed world. Hindrances or faltering of the Asian economies could lead to stagnation or slowdown of the economic recovery of the Western world. There is worry on this account as the Asian countries still remain vulnerable to a repeat of the Asian financial crisis of 1997 that occurred at the time of an economic boom in the region.

Furthermore, economist point out that Asian countries like China that are using their ample financial resources to spur exports and their economic growth would have to use large amounts of financial resources to maintain this pace economic growth. They estimate that the amount of financial resources that Asian countries would have to use to sustain this economic growth could be as high as $1 trillion and may pan out to be a “bottomless pit”. (3). It is for these reasons that I would like to revisit the Asian Financial Crisis of 1997.

Works Cited 1. Corbett, Jenny & Vines, David. “The Asian Crisis: Lessons from the Collapse of Financial Systems, Exchange Rates and Macroeconomic Policy”. The Asian Financial Crisis: Causes, Contagion and Consequences. Eds. Pierre-Richard Agenor, Marcus Miller, David Vines & Axel Webber. Cambridge, UK: Cambridge University Press, 1999. 67-111. 2. ESCAP. Economic and Social Survey of Asia and the Pacific 2010: Sustaining Recovery and Dynamism for Inclusive Development. Blue Ridge Summit, PA: United Nations Publications. 3. Hodgins, Mark.

The Great Reset. Bloomington, IN: AuthorHouse, 2009.