CURRENCY CRISES AND CONTAGION CHANNELS IN ASIAN ECONOMIES

Abstract

This study examines multiple transmission mechanisms that propagate and amplify shocks across Asian nations owing to financial turbulence with emphasis on global shock transmission between economies that prioritise ‘trade’ and ‘financial’ connections in four countries: Indonesia, Korea, Malaysia, and the Philippines. Based on the logit estimation outcomes, a higher degree of trade openness amplifies the implications of shocks on the economy. Relevant implications are drawn for optimal regional monitoring and the coordination of integration as the economic fundamentals associated with the currency crises complements the first-generation models of speculative attacks.