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Why did problems in Thailand contagiously affect other Asian countries? Why does the fall in a...

Why did problems in Thailand contagiously affect other Asian countries? Why does the fall in a country’s currency affect its stock market?

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The problems in Thailand contagiously affect other Asian countries because Thailand is an open economy and many investors invest in the country and also Thailand investors invest highly in other countries also. This makes Thailand an extremely open economy with no regulations and thus large number of interconnections with rest of the world. Thus, problems in Thailand contagiously affect other Asian countries.

A fall in the country's currency affect its stock market because fall in the country's currency lead to outflow of capital from the country because of the fall in the returns andf thus investment in stock market falls.

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