East Asian Financial Crisis Essay Example | Topics and Well Written Essays - 2750 words

East Asian Financial Crisis - Essay Example The intention of this study is the East Asian financial crisis of 1997-98 that culminated into one of the most devastating global shocks in the twentieth century. Its far-fetched effect could be compared with nothing less than that of the Great Depression of 1930s which had entwined the US economy into stagflation. In fact, what prevented the 1930s depression from spreading out throughout the world was the lack of ample networking among various economies. On the other hand, the impact of the East Asian crisis by the end of the millennium was more brutal or burgeoned due to a close-knitted financial relationship already been accomplished between them. The link was especially prominent among the underlying economies in South East Asia, bound together by a regional pact ASEAN that aimed at strengthening and shielding at the same time, the international trade position of the East Asian tigers. These economies had secured massive as well as exemplary economic growth rates that awed many o thers. When these economies were recording a growth in real income equal to 7 percent per annum, the US economy lagged behind at a modest 2 percent. Many nations tried to imitate the fiscal configuration of policies being framed by these nations. However, the cheap labor that the economies in the South East Asian region were endowed with, could not be equaled anywhere else in the world. Hence, it was infeasible for others to carry on their production and supply their outputs at competent prices in the world market.