Fundamental Causes of the Asian Financial Crisis: An Econometric Study

The Asian financial crisis is one of the great economic phenomena in the world in recent times, and it has wide-ranging devastating effects on the economies and the peoples of many nations, developed and developing. While descriptive and analytical studies on the possible causes of the crisis are numerous, a rigorous and empirical analysis of the fundamental causes of the turmoil using historical data and contemporary advanced econometric methodologies has not been formally carried out or reported. This chapter is an attempt in this direction with the purpose of providing some substantive information for a better understanding, informed discussions, better formulation of practical rescue policy and other policy impact studies by all interested in this major meltdown.