Financial Market Responses to Policy Options in Hong Kong, Indonesia, and Singapore during the 1997 Asian Financial Crisis

Open Access
Author:
Edwards, Christopher Pierce
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Dr Bumba Mukherjee, Thesis Supervisor
  • Subhanan Mukherjee, Thesis Supervisor
  • David Shapiro, Honors Advisor
Keywords:
  • financial markets
  • policy options
  • 1997 crisis
  • asian financial crisis
  • singapore
  • indonesia
  • hong kong
Abstract:
During the Asian Financial Crisis of 1997, the governments of Hong Kong, Indonesia, and Singapore took specific actions in response to the effects of the crisis. Analyzing the reaction of respective financial markets using respective indices to each action leads to a broad blueprint for any nation experiencing a similar crisis. Findings reveal that nations can avoid the devastating nature of short term shocks by pursuing fixed or managed rates, bilateral loans, pro-business policies, defense against speculators, and transparency. The fundamentals and foundations of a national economy will always dictate the long-term ability of a nation to weather a crisis but placating financial markets, thereby escaping the effects of shocks, will benefit every citizen and avoid economic degradation.