Title
Currency Crises in Asia and Latin America: A Comparison
Abstract
In the second half of the 1990s, many Asian and Latin American
countries suffered from the currency crises. But the causes and
processes of currency crisis are not necessarily the same, though
there are many common aspects. The purpose of this paper is to
compare the currency crises in both regions paying attention on
the inconsistent macroeconomic policies under the rapid liberalization.
We first build a theoretical model in which both macro fundamentals
and agents' expectations are to play crucial roles. The model
implies that a deterioration of macro fundamentals would increase
the possibility of currency crisis through changes in behavioral
patterns of private agents and government. We then compare the
macro fundamentals of the five crisis countries in Asia and Latin
America. Among other macro fundamentals, we focus on the soundness
of banking sector as one of the most important factors that made
the crisis process different in two regions. Finally we examine
the future tasks for these countries to stabilize the currencies.
Shoji NISHIJIMA
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501 Japan
Phone: (81) 78 803 7036
Fax: (81) 78 803 7059