Overcoming Asia's Currency and Financial Crises: A Theoretical Investigation
Occasional Papers Series
Because of globalization, a financial crisis in one part of the world can have far-reaching adverse effects; the crisis that started in Thailand in 1997 ultimately affected countries as far away as the Republic of Korea and Brazil. Thus more important than attempting to prevent these crises is the need to cope with currency and financial crises ex post and to develop the tools and methods for overcoming them after their occurrence. The present volume examines the high interest rate policy intended to stave off a currency crisis, banking policies for weathering a financial crisis, and corporate restructuring policies for revitalizing economic activity. Theoretical analyses were done using a wide range of analytical frameworks such as the overshoot model of exchange rates, time inconsistency, the agency approach for corporate finance, and comparative studies of financial systems.