Introduction to Capital Flows and the International Financial System

It has become easier, with the passage of time, to forget what an extraordinary event the Asian financial crisis was. Before the crisis, the countries of east Asia had grown faster, for longer, than any other countries in recorded history. They had transformed their economies and the standard of living of their people in the course of a single generation. In 1960, some of the east Asian countries had standards of living similar to those in Africa; by the mid 1990s, the contrast between economic conditions in the two regions was very stark indeed. The miracle of east Asian economic growth was something to be admired, studied, and emulated.