International Economy Term Paper

Open, View, and/or
Download this Document

Total Length: 1144 words ( 4 double-spaced pages)

Total Sources: 1+

Page 1 of 4

agree with the belief that the Asian financial crisis was rooted in governmental interference. I also agree with the fact that the export-led model is no longer sustainable because international markets are saturated. The mandating and structuring of regional markets by the nations in East Asia, particularly Japan, China, Malaysia, and Singapore, have proven to be devastating to their relative economies.

In order to understand the Asian financial crisis, it is important to explore its origins. Throughout the 1980s, the Asian countries, particularly Japan, experienced major financial growth. Industries, especially those involving high technology, were thriving in East Asia (Sato, Ryuzo, and Takashi Negishi). In the mid 1990s, signs began to emerge that the economy was much less stable than people had originally thought (Sato, Ryuzo, and Takashi Negishi).

Firstly, capital account surpluses were greatly exceeding the deficits of many of the East Asian countries, including Japan, Malaysia, and Singapore. The increase in domestic money supply caused domestic "absorbtion," and a dramatic slowing of international investment (Liping). The economic problems were causes for concern, but not necessarily strong enough reasons to plunge the East Asian economy into the state it is today. The real catalyst in the Asian financial crisis was how the nations' governments handled the economic situation.

A prime example is the actions taken by the Japanese government. The Japanese government tried extensively to fend off the economic slowdown of the mid 1990s. In an effort to save domestic corporations, the government advanced many "rights" to companies that were in debt, or fighting bankruptcy (Liping). In turn, the government was supporting failing companies, and in doing so, neglecting the natural economic dynamic that follows a slowdown.

The nation's GDP steadily decreased throughout the 1990s, yet the government was still allotting funds and recourses to the failing organizations, creating large fiscal imbalances in the budget (Liping).

Stuck Writing Your "International Economy" Term Paper?

View All Our Example International Economy Term Paper

Have A Custom Example Essay Written

The government also used a substantial amount of its funds to stabilize the stock market.

The biggest beneficiaries of the government subsidies were Japanese banks (Patrick). The government implemented interest rate controls, preventing the competition between the banks (Patrick). In turn, their assets grew at the same rate, and this example of "stifled" competition was reflected in the government's handling of most of Japan's other industries, as well (Patrick). In his essay, "The Causes of Japan's Financial Crisis," Columbia professor Hugh Patrick notes that the system was essentially the strong supporting the weak. He goes on the write, "The system was based on close, symbiotic relationships between the powerful Ministry of Finance, and the big banks, securities companies, and insurance companies. These collusive arrangements were based on the leadership of the Ministry of Finance through administrative guidance, price setting, protection, and restriction of competitive impulses. Accordingly, it was a system of implicit guarantees against losses for banks and depositors" (Patrick).

The policy of financially boosting failing banks and corporations perpetuated the economic downturn in Asia, and eventually led to the long-term recession we have witnessed over the past ten years. Profitable companies were constantly having to carry the weight of the failing ones in Japan, whether through government mandated mergers, or through government manipulation of the markets.

Also, the lack of domestic competition served to stagnate the progress of many East Asian companies, which in turn, lowered their status in the international marketplace. The export markets for many of these countries slowed, and so did their foreign investment.

The governments of Malaysia and….....

Show More ⇣

     Open the full completed essay and source list


OR

     Order a one-of-a-kind custom essay on this topic


Related Essays

Globalization is Not Americanization

other proudly American companies have dominated the corporate landscape of a globalized international economy, a wealth of non-American companies have likewise participated in the dissemination and distribution of ideas and neoliberal policies that characterize postmodern globalization. In some ways, globalization is the antithesis of Americanization. As Collins (2015) points out, globalization “has led to the continuing deindustrialization of America,” as labor markets have become transnational (p. 1). Whereas the United States became a 20th century superpower because of its industrial edge, the nation has since ceded that edge to countries that now provide the world’s manufacturing and industrial labor forces: China, India,… Continue Reading...

Shopping Malls in Latin America

shopping mall business and Latin American communities closer in the direction toward collaboration with the interests of the international economy. With the development of shopping mall professionals, international organizations such as the ICSC will go on having a significant role to play in the Latin American area, not only by instigating professionalization but also educating and training them. A key aspect that can be perceived is the fact that the international shopping mall industry benefits from the pre-contemporary practices and network associations amidst the reigning elites in Latin America that it laments (Davila, 2016). Chapter Three Summary The third chapter delineates the wars in the retail world with… Continue Reading...

A Concise Analysis of Financial Performance of Companies

rise in number of ESG opportunities and risks within the contemporary international economy. Timely and improved organizational policy-related data access and the effect of organizational policy on communities have made it considerably convenient for customers to express their dissatisfaction by simply quitting a brand. When international brands' images are sullied by ESG-related problems, the resultant instantaneous backlash has the capacity of abruptly and negatively impacting income and demand (Eccles, Ioannou & Serafeim, 2014). Organizations having a poor reputation when it comes to ESG related matters are vulnerable to monetary risks, including a very genuine threat of facing lawsuits in the future,… Continue Reading...

sample essay writing service

Cite This Resource:

Latest APA Format (6th edition)

Copy Reference
"International Economy" (2003, June 09) Retrieved June 4, 2026, from
https://www.aceyourpaper.com/essays/international-economy-150641

Latest MLA Format (8th edition)

Copy Reference
"International Economy" 09 June 2003. Web.4 June. 2026. <
https://www.aceyourpaper.com/essays/international-economy-150641>

Latest Chicago Format (16th edition)

Copy Reference
"International Economy", 09 June 2003, Accessed.4 June. 2026,
https://www.aceyourpaper.com/essays/international-economy-150641
   

Open, View, and/or
Download this Document
order custom essay example