IDEAS home Printed from https://ideas.repec.org/a/jfr/bmr111/v2y2013i4p41-55.html
   My bibliography  Save this article

Macro and Micro-Economic Policies in Financial Crises: Argentina 2000 and South Korea 1998

Author

Listed:
  • Frederick Betz

Abstract

Modern nations depend upon foreign investment to fund industrial developments in the nation and to fund government infrastructure developments. Governments use foreign investment to principally fund government services, when the tax base of the country has been insufficient to balance the government budget. But deficits can continue to grow, year after year. When the annual government budget deficit becomes a significant portion of the annual revenue of an economy (GNP), then foreign investors lose confidence in a government¡¯s capability of continuing to finance its deficits. Investors stop buying government securities. The national currency exchange rate plunges. Local banks in a nation become insolvent. Bank runs occur as savers withdraw deposits from banks. Credit stops in a national economy, and businesses are unable to finance day-to-day production and pay wages. The economy plunges into a depression. Masses of people are unemployed. Property is lost. Families starve. Governments fall. The society descends into chaos. This occurred in the Asian Financial Crises, beginning in Thailand and spreading to other countries, including South Korea in 1997 and Argentina in 1999. Reviewing these cases, one can see that international financial institutions had neither correct economic models nor effective policies nor proper regulatory power -- to ensure that a global financial system was sound and also beneficial to economic growth in the nations of the world. And from this, one can see that IMF policies should have been instead focused not just on ¡®macro-economics¡¯ but also on the ¡®micro-economics¡¯ of each nation.

Suggested Citation

  • Frederick Betz, 2013. "Macro and Micro-Economic Policies in Financial Crises: Argentina 2000 and South Korea 1998," Business and Management Research, Business and Management Research, Sciedu Press, vol. 2(4), pages 41-55, December.
  • Handle: RePEc:jfr:bmr111:v:2:y:2013:i:4:p:41-55
    as

    Download full text from publisher

    File URL: http://www.sciedupress.com/journal/index.php/bmr/article/download/3606/2122
    Download Restriction: no

    File URL: http://www.sciedupress.com/journal/index.php/bmr/article/view/3606
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Polak, Jacques J., 1998. "The IMF monetary model at 40," Economic Modelling, Elsevier, vol. 15(3), pages 395-410, July.
    2. Sheng,Andrew, 2009. "From Asian to Global Financial Crisis," Cambridge Books, Cambridge University Press, number 9780521134156, September.
    3. Graciela L. Kaminsky & Carmen M. Reinhart, 2001. "Bank Lending and Contagion: Evidence from the Asian Crisis," NBER Chapters, in: Regional and Global Capital Flows: Macroeconomic Causes and Consequences, pages 73-99, National Bureau of Economic Research, Inc.
    4. Ito, Takatoshi & Krueger, Anne O. (ed.), 2001. "Regional and Global Capital Flows," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226386768, September.
    5. Sheng,Andrew, 2009. "From Asian to Global Financial Crisis," Cambridge Books, Cambridge University Press, number 9780521118644, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ajit Singh, 2012. "Financial Globalization and Human Development," Journal of Human Development and Capabilities, Taylor & Francis Journals, vol. 13(1), pages 135-151, February.
    2. Cipollini, A. & Kapetanios, G., 2009. "Forecasting financial crises and contagion in Asia using dynamic factor analysis," Journal of Empirical Finance, Elsevier, vol. 16(2), pages 188-200, March.
    3. Kaminsky, Graciela L. & Reinhart, Carmen M., 2002. "Financial markets in times of stress," Journal of Development Economics, Elsevier, vol. 69(2), pages 451-470, December.
    4. Horacio Ortiz, 2012. "Anthropology – of the Financial Crisis," Chapters, in: James G. Carrier (ed.), A Handbook of Economic Anthropology, Second Edition, chapter 35, Edward Elgar Publishing.
    5. Andrew Sheng & Kian Teng Kwek & Cho Wai Cho, 2012. "Patterns Of Exchange Rates And Current Accounts: The East Asian Waltz," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 57(02), pages 1-34.
    6. Sheng, Andrew & Singh, Ajit, 2012. "The Challenge of Islamic Finance," MPRA Paper 53044, University Library of Munich, Germany.
    7. Kwan, Yum K. & Leung, Charles Ka Yui & Dong, Jinyue, 2015. "Comparing consumption-based asset pricing models: The case of an Asian city," Journal of Housing Economics, Elsevier, vol. 28(C), pages 18-41.
    8. Singh, Ajit & Sheng, Andrew, 2011. "Islamic finance revisited: conceptual and analytical issues from the perspective of conventional economics," MPRA Paper 39007, University Library of Munich, Germany, revised 10 Apr 2012.
    9. Shaukat, Mughees & Mirakhor, Abbas & Krichene, Noureddine, 2013. "Fragility Of Interest-Based Debt Financing: Is It Worth Sustaining A Regime Uncertainty?," MPRA Paper 56362, University Library of Munich, Germany.
    10. Danilov Yuri, 2016. "The experience of financial markets reforms in the countries – competitors of Russia in the global capital market," Research Paper Series, Gaidar Institute for Economic Policy, issue 171P, pages 156-156.
    11. T.J. Pempel, 2012. "Global Financial Regulation: G2 or G20?," Chapters, in: Jehoon Park & T. J. Pempel & Geng Xiao (ed.), Asian Responses to the Global Financial Crisis, chapter 11, Edward Elgar Publishing.
    12. Yongil Jeon & Stephen Miller, 2004. "The effect of the Asian financial crisis on the performance of Korean nationwide banks," Applied Financial Economics, Taylor & Francis Journals, vol. 14(5), pages 351-360.
    13. Takuji Kinkyo, 2004. "Transmission channels of capital flow shocks: why Korean crisis was so severe," Working Papers 139, Department of Economics, SOAS University of London, UK.
    14. B. Bakhtyar & Ch. Lim & Y. Ibrahim & R. Islam & K. Sopian, 2014. "Moving Up On Solar Industry Value Chain: A Respond To World Bank’S Prescription For Malaysia," American Journal of Economics and Business Administration, Science Publications, vol. 6(2), pages 72-80, July.
    15. Xiang Xu & Alice Siqi Han, 2018. "Will China Collapse: A Review, Assessment And Outlook," Economics Working Papers 18104, Hoover Institution, Stanford University.
    16. repec:ilo:ilowps:457693 is not listed on IDEAS
    17. Helleiner, Eric & Pagliari, Stefano, 2011. "The End of an Era in International Financial Regulation? A Postcrisis Research Agenda," International Organization, Cambridge University Press, vol. 65(1), pages 169-200, January.
    18. Abbas Mirakhor, 2014. "Foundations of risk-sharing finance: an Islamic view," Chapters, in: Mervyn K. Lewis & Mohamed Ariff & Shamsher Mohamad (ed.), Risk and Regulation of Islamic Banking, chapter 6, pages 107-128, Edward Elgar Publishing.
    19. Fazio, Giorgio, 2007. "Extreme interdependence and extreme contagion between emerging markets," Journal of International Money and Finance, Elsevier, vol. 26(8), pages 1261-1291, December.
    20. Graciela L. Kaminsky & Carmen Reinhart, 2003. "The Center and the Periphery: The Globalization of Financial Turmoil," NBER Working Papers 9479, National Bureau of Economic Research, Inc.
    21. Prasanna Gai, 2013. "Systemic risk measurement and macroprudential policy: Implications for New Zealand and beyond," New Zealand Economic Papers, Taylor & Francis Journals, vol. 47(1), pages 95-110, April.

    More about this item

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jfr:bmr111:v:2:y:2013:i:4:p:41-55. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Simon Lee (email available below). General contact details of provider: http://bmr.sciedupress.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.