SOCI 254 Lecture Notes - Lecture 11: 1997 Asian Financial Crisis, Four Asian Tigers, World Currency
8 May 2017
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Document Summary
After the 1970s the asian tigers experienced crazy fast growth, which was seen as the asian miracle. Large inflow of fdi, 8-12% gdp growth rates in the 1980s-1993. Caused a low rate of savings, so banks suddenly didn"t have money. Had to borrow from imf and international banks. When imf, wb, and us federal reserve increased interest and dollar exchange rates, the us became a more attractive investment center. Local currency had to be paid more to get same amount of dollars. Reduced the profitability of things and caused inflation in asia. Led to commodification of money that damaged asia. Investment was risky thanks to a low profit margin, so people began to invest in things like mortgages, stocks, and housing. Local currencies lost value bigtime because borrowing from the us wasn"t profitable but governments needed money to run its services. Thailand was the first one to go down, as people lost their investments and services.
