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.
Jomo K. S. (PhD, Harvard, 1978) is Professor in the Applied Economics Department, University of Malaya, Kuala Lumpur, Malaysia. His major book publications include A Question of Class, Growth and Structural Change in the Malaysian Economy, Southeast Asia's Misunderstood Miracle (with others) and Malaysia's Political Economy (with E. T. Gomez). Chang and Khoo are experienced Malaysian researchers,while the other contributors to the volume are all based in Malaysia.
Acknowledgements; Introduction - Jomo K. S; 1. From Currency Crisis to Recession - Jomo K. S.; 2. Pre-Crisis Economic Weaknesses and Vulnerabilities - Rajah Rasiah; 3. Financial Governance, Liberalisation, Crisis and Responses - Natasha Hamilton-Hart & Jomo K S.; 4. Financial Liberalisation and System Vulnerability - Chin Kok Fay & Jomo K. S.; 5. Capital Flows - Jomo K. S.; 6. Capital Flows Volatility - Jomo K. S. with Liew San Yee and Laura Kaehler; 7. Capital Controls - Jomo K. S.; 8. Social Impacts - Jomo K. S. with Lee Hwok Aun; 9. East Asian Comparisons - Jomo K. S.