Adjustments after speculative attacks in Latin America and Asia

No AccessWorld Bank Latin American and Caribbean Studies1 Feb 2013Adjustments after speculative attacks in Latin America and AsiaA tale of two regions?Authors/Editors: Guillermo Perry, Daniel LedermanGuillermo Perry, Daniel Ledermanhttps://doi.org/10.1596/0-8213-4541-9SectionsAboutPDF (0.5 MB) ToolsAdd to favoritesDownload CitationsTrack Citations ShareFacebookTwitterLinked In Abstract:The paper analyzes the adjustment process in the aftermath of speculative attacks against the currencies of six countries - Argentina, Brazil, Mexico, Indonesia, Korea, and Thailand. Even though the Mexican and Argentine crises of 1995, and the Brazilian adjustment after October 1997, were certainly costly, the Asian crises of 1997 were deeper and the recovery of the economy was slower. The paper relies on rank-correlation analysis, and economic indexing and growth decomposition techniques to evaluated the explanatory power of several hypotheses of why the recessions in Asia were more severe. The paper concludes that the large size of short-term external debt relative to GDP, the higher incidence of leverage and currency mismatches, the higher rates of investment, plus the regional character of the Asian crises and the high export similarity across the Asian economies contributed to the deeper economic downturn. However with rising regional trade and financial development, the aftermath of future speculative attacks in Latin America may look more like the recent East Asian tales of adjustment. The paper draws policy implications for reducing the costs of the macroeconomic adjustment after currency crises. Previous bookNext book FiguresReferencesRecommendedDetailsCited ByOrder Flow and Exchange Rate Dynamics in BrazilSSRN Electronic JournalCrisis and the Poor: Socially Responsible MacroeconomicsSSRN Electronic JournalCrises and the Poor: Socially Responsible MacroeconomicsSSRN Electronic Journal View Published: June 1999ISBN: 978-0-8213-4541-2 Copyright & Permissions Related RegionsEast Asia & PacificLatin America & CaribbeanRelated CountriesIndonesiaRelated TopicsFinance and Financial Sector DevelopmentMacroeconomics and Economic GrowthPrivate Sector Development KeywordsCURRENCY FLUCTUATIONSPECULATIONEXTERNAL DEBTFINANCIAL CRISESMONETARY MEASURESMONETARY POLICYFISCAL POLICYFINANCIAL SYSTEMSINFLATIONEAST ASIA AND PACIFICLATIN AMERICA AND THE CARIBBEANECONOMIC CONDITIONSECONOMIC POLICYFISCAL POLICIESFISCAL POLICYMONETARY POLICIESRECESSIONSSPECULATIVE ATTACKSPECULATIVE ATTACKSSPECULATIVE PRESSURES PDF DownloadLoading ...

Latin Americans · Political science · Terrorism, Counterterrorism, and Political Violence · 1945 · 1982 · asia · Economic conditions · Latin America · Recessions · Structural adjustment (economic policy)