Asian Financial Crisis
The "Asian financial crisis", did not solely affect the countries of Asia but also had an impact on other world economies including the United States. This paper will look at the short run effects that occurred on the U.S. Steel Industry as well as predictions of long run effects in the future. "Asian financial crisis" started in July 1997, when speculators and Thai residents were trying to sell the baht and buy U.S. dollars, because the fixed exchange rate of the baht were pegged artificially high to the U.S. dollar. This caused the baht out of the country, and the Thai government ran out of foreign exchange reserves. As a result, capital became scarcer, the baht devalued by 20% as measured against the U.S. dollar, and interest rates on borrowed money sharply increased. Productivity in Thailand decreased, unemployment became high, and businesses went bankrupt causing the worst recession in Thai postwar history. Once the crisis hit Thailand, the prices for exports fell causing other Asian currencies to be devalued as well. In particular, Indonesia's currency, the rupiah came under attack and had to be devalued by about 90% over the period of just a few months. The economy as a whole in Indonesia has been even more se
These effects will be felt for a long time due to devastating blows to the U. Many government officials in Asia along with some economists look unfavorable upon the conditions attached to the IMF's aid packages which include: high interest rates, tax raises, and public spending cutbacks. The vulnerability of the financial systems resulted in an outflow of short-term capital from the system, leading to rapid selling of currency and stocks by investors. Business week Retrieved February 26, 2000 from the World Wide Web: http://www. Prices of hot rolled steel fell by 30% to about $250 tons resulting in 10,000 steel workers losing their jobs. more because they are promoting free trade and competition. Russo calls Hanbo 'poster child' for subsidy-heavy economies. Tariffs and quotas will raise prices and benefit the steel industry with higher wages and profits but this is at the cost of most American families. steel industry has experienced many negative short run effects associated with the "Asian Financial Crisis" that will be felt for a long time.
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