Word: asia
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Dates: during 1990-1999
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Inevitably, worries about Japan color the prospects of the whole region. And Japan was in trouble long before anyone even imagined that the words Asia and crisis could be used in the same sentence...
...developing Asia suffered from an acute, potentially lethal but short-lived fever, Japan suffers from a slow, wasting disease, the result not of the nation's vices but of its virtues. While there are many things wrong with Japan, the immediate problem is excessive thrift: Japanese households simply save more than the country's businesses can be persuaded to invest, even at a zero interest rate...
Bizarrely, the Japan syndrome seems to have spread to Asia's other giant. China never caught the Asian flu, because foreign-exchange regulations--though they fostered inefficiency and corruption--prevented hot money from leaving and deterred it from coming in the first place. Instead, the problem is, believe it or not, excessive thrift. Incredibly for a developing country, China is experiencing pronounced deflation. In the end, China, like Japan, may be forced to roll the printing presses--a move that would not be possible without a devaluation of the renminbi, which would make the lives of the country's neighbors...
...short, Asia will probably not have the same problems over the next two years that it had over the past two, but it is at considerable risk of having different problems. It ain't over until the sumo wrestler sings...
Adversity is supposed to come with a silver lining. Has Asia's crisis laid the foundation for sounder economic growth in the future? The answer is a definite maybe. The crisis has curbed some of the worst abuses of crony capitalism, and it has tempered the dangerous belief that "Asian values" somehow made the region's economies bulletproof. The crisis has also probably done some good by softening free-market fundamentalism: countries are less likely to be pressured into throwing their capital markets open to the world before their financial markets are ready, and Washington is less likely to view...