The evidence in favor of the panic interpretation in Asia is both indirect and direct. The
indirect evidence has two main parts. First, the crisis was unanticipated, suggesting that it can not be easily explained by fundamentals. Almost no one who was closely watching Asia in the months before the crisis, even those who were deeply familiar with Asia=s flaws, predicted an economic meltdown. Second, even ex post, it is hard to find fundamental explanations commensurate with the depth of the crisis. The problems that Asia=s critics now point to should have led to a growth slowdown, or even a recession, not a deep contraction and implosion of both the banking and corporate sectors.
The evidence in favor of the panic interpretation in Asia is both indirect and direct. Theindirect evidence has two main parts. First, the crisis was unanticipated, suggesting that it can not be easily explained by fundamentals. Almost no one who was closely watching Asia in the months before the crisis, even those who were deeply familiar with Asia=s flaws, predicted an economic meltdown. Second, even ex post, it is hard to find fundamental explanations commensurate with the depth of the crisis. The problems that Asia=s critics now point to should have led to a growth slowdown, or even a recession, not a deep contraction and implosion of both the banking and corporate sectors.
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