In the summer of 1997, capital flight forces several East Asian countries to let their currencies float: the ensuing Asian Financial Crisis threatens the international financial system.
After the end of the Cold War in 1991, capital flowed into booming East Asian countries (Thailand, Philippines, Malaysia, Indonesia, and South Korea). Foreign investors were animated by their impressive economic growth since the 1960s, their stable and pegged exchange rates, and their policies of financial market liberalization. Private net inflows to these countries increased…
