Malaysian Eclipse: Economic Crisis and Recovery
Jomo Kwame Sundaram
Zed, 2001 - Political Science - 321 pages
Examines the Malaysian economic crisis of 1997-98. The book argues that the crisis was not due to macroeconomic profligacy on the part of governments, but was due to foreign portfolio investor sentiment, herd behaviour, transborder contagion, reversal of short-term capital flows, asset price deflation and their ramifications. The Malaysian economy is compared to others in the region and the effects of contradictory fiscal and monetary policies are traced. The remarkable recovery in Malaysia seen as principally due to successful Keynesian reflationary efforts as well as fortuitous external circumstances, most notably the electronics boom. The authors conclude that reform in the international financial system is urgently needed, but warn that reform prospects have worsened with economic recovery and the apparently receding threat of fresh crises.
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From Currency Crisis to Recession 1
Annual Changes in Gross Domestic Product by
PreCrisis Economic Weaknesses and Vulnerabilities
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activity adversely Annual asset bank began billion borrowings capital controls caused cent companies compared confidence consequences construction continued contributed controls corporate costs countries crises crisis currency debt declined dollar domestic early East Asian economic effects especially exacerbated exchange export external Figure financial system flows foreign capital inflows funds greater growth higher households impact important increased Indonesia industrial inflation initiatives institutions interest interest rates investors involving KLCI Korea labour late lending less limited loans lower mainly major Malaysia managers manufacturing measures monetary months Note official period political portfolio investment production quarter rates recession recovery reduced reforms region relatively Report reserves responses ringgit savings sector securities September 1998 share short-term shows significant social Source South Korea stock market suggest Table term Thailand trade various volatility vulnerable workers