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Eli Econ Dev

The document discusses the rapid economic growth in Southeast Asia during 1994 and 1995, driven by significant foreign capital inflows and booming stock markets, which eventually led to current account deficits. It highlights issues such as inadequate fund management, ineffective sterilization of capital inflows, and nonperforming loans that contributed to economic challenges. The document also outlines strategies for economic recovery, including the revival of domestic demand, improved regulation, and better understanding of the crisis process.

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Rubielyn Necio
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11 views2 pages

Eli Econ Dev

The document discusses the rapid economic growth in Southeast Asia during 1994 and 1995, driven by significant foreign capital inflows and booming stock markets, which eventually led to current account deficits. It highlights issues such as inadequate fund management, ineffective sterilization of capital inflows, and nonperforming loans that contributed to economic challenges. The document also outlines strategies for economic recovery, including the revival of domestic demand, improved regulation, and better understanding of the crisis process.

Uploaded by

Rubielyn Necio
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

ELIZANDRA DE GUZMAN

ECONOMIC DEVELOPMENT

THE BUBBLE ECONOMY

 All the countries in Southeast Asia grew very rapidly during 1994 and 1995.
 Huge flow of foreign capital was channeled to both fixed investment and equity portfolios.
 Current account deficits widened and stock markets boomed

4.2.1

 INADEQUATE FUND MANAGEMENT SYSTEM


 INEFFECTIVE STERILIZATION OF CAPITAL INFLOWS
 RESTRICTIONS ON FOREIGN BANKS ENTRY
 NONPERFORMING LOANS

BOX 4.1
MORAL HAZARD
 HIGH COSTS OF FINANCIAL SERVICES
 BALANCE SHEETS

4.3.3 ECONOMIC RECOVERY


 Revival of domestic demand supported by exports and a restoration of investor confidence
 Softer budget deficits and lower interest rates
 Sustained growth

4.4.1
 CONSOLIDATION
 SUPERVISION AND REGULATION
 ACCOUNTING AND DISCLOSURE
 STOCK MARKETS
 TRADE POLICIES
 FOREIGN DIRECT INVESTMENT
 HUMAN CAPITAL
 BETTER UNDERSTANDING OF THE CRISIS PROCESS
 NEW DATA
 NEW ANALYSIS

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