Watson Institute for International and Public Affairs

Stallings Explores Times of Economic Crisis in East Asia

January 27, 2011

The international financial crises of 1997-98 and 2008-09 are watersheds that had a profound impact on East Asian economies and polities, but they did so in different ways that are important to understand.

In the 1990s, the financial systems of the region itself played a major role in detonating and propagating the crisis. In the 2000s, by contrast, the principal problems in East Asia came from the outside, mainly via the disruption of world export markets.

How do we account for the minor role that East Asian financial institutions played in the current crisis, especially since banks and related institutions were at the center of the economic distress in other parts of the world? This is the main puzzle addressed in “A Tale of Two Crises: The Political Economy of East Asian Finance in the 1990s and 2000s,” a working paper by Institute Professor Barbara Stallings, who published it as a fellow at the East Asia Institute (EAI).

Stallings has presented the paper in Korea, at EAI and Korea University; in China, at Fudan and Peking universities; and will be presenting it in Japan in April, at Keio University.