ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Asian Eclipse India and China in the Penumbra

Asian Eclipse: India and China in the Penumbra?
Ajit S Bhalla Dilip M Nachane Competing explanations of the Asian crisis are clustered around four factors, acting singly or in conjunction: (i) structural aspects, (ii) macro-economic imbalances, (iii) financial failures, and (iv) self-fulfilling or sunspot features. The authors' preference is for the financial explanation, though this does not amount to complete disavowal of the responsibility of structural factors in precipitating the crisis. The financial collapse was the logical culmination of an inappropriate financial liberalisation strategy with volatile capital flows acting as a triggering factor. The IMF's misdiagnosis played a part in aggravating the crisis and in prolonging its duration.

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