Question

We discussed currency mismatches in the form of original sin. What other type of mismatch was a problem during the East Asian crises?

		maturity mismatches
		currency mismatches
		mismatching public and private sector deficits
		the prime ministers socks

Which of the following were features common to the East Asian crises?

		capital inflow boom
		internal financial fragility
		capital reversal and speculative attack
		collapse of currency stability

The nickname given by the press to East Asian economies during their high economic growth and booming capital inflow years was   .

		dragons
		lions
		tigers
		bears

Large capital inflows can be as bad as large capital outflows if     .

		they are primarily in the form of FDI
		They are primarily in the form of government borrowing
		they lead to a build up of speculation and risky asset positions building financial fragility
		a capital market boom is never a bad thing

Answer 1

1)A.....1997 east asian crisis was generally a currency crisis and it is also triggered by maturity mismatches.

2) all options are correct except option A.

3)C....tigers........ before crisis east east asian economies were famously called as tiger economies due to their impressive growth records.

4)C.... because, capital inflows in the form of fdi or government borrowing promotes stability. Some times capital inflows are considered serious if they lead to creation of speculations and risky assets threatening fiscal stability of the economy.