Essay About Economic Crisis

Contradictions and Crises in Economic Transformation:

Political Turmoils in Post-Crisis Malaysia In the academic circle of Southeast Asian Studies, the financial crisis in 1997 is the juncture of continuities and changes because the crisis enormously impacts political and economic systems of the countries in Southeast Asia. Regarding its impacts, the essay has the aim to examine how the financial crisis affects the politics of contemporary Malaysia.

The Impossibility Trinity Before answering the main question, the essay explains the emergence of the economic crisis. The mainstream macroeconomic literature usually describes that the Asian financial crisis was a consequence of the wrong macroeconomic policy. According to the theorem of

One of the examples can be seen from the writings of neo-classical schools, which argues that the lack of market discipline in economic policies, that is inherent in the corrupted business-government relations (Rodan, Hewison and Robison, 2006: 16-8). The neo-classical economic also stated that the strong state and institutional foundations are crucial for establishing an efficient market mechanism as well as preventing interest groups from the processes of policy design and

Wade (1998) argues that the crisis was not only a result of crony capitalism or domestic policy failures but also international capital movement and global economic order, which has been shaped by interests in the West. Wade suggests that the crisis had a root in Plaza Accord in 1985, which caused Yen appreciate against the US Dollars. Consequently, the Accord drove Japanese manufacturers to relocate in Southeast Asia; the accord also led to the expansion of foreign borrowing in the region, due to international excess liquidity that was caused by developed countries’ expansion of monetary