MACROECONOMIC SOUNDNESS of CRISIS COUNTRIES BEFORE 1997 ASIAN CRISIS

The third crises theories have allied on that the canonical (first and second generation) cirises theories couldn’t have explained the 1997 Asian crisis’ case. The most important argument of the thesis as that the Asian crisis couldn’t have been explained by the third generation crisis theories is that “macroeconomic fundemantals had been sound in the pre-crisis period in the 5 Asian countries.” In the article it has been foccused on how sound or weak the macreconomic fundemantals had been before the Asian crisis in respect to the occurrence or no-occurrence of a crisis. It has been targotten to repond two main questions: firstly “have the macroeconomic fundemantals been sound that not to necessiate the occurrence of a crisis or get the occurrence of a crisis be impossible?”. Second “is there or not a negative, strong and one by one relation between the soundness-weakness in the macroeconomic fundemantals and the real, cumulative cost of the crisis (the severity of the crisis)?” In the study it was insisted on the 5 Asian countries (Indonesia, Philippines, Korea, Malaysia, and Thailand) and these five Asian countries’ average (A5’s average). About first question it was arrived at that “the macroeconomic fundemantals had been so sound in the pre-crisis period that the occurrence of the crisis is impossible”. In this matter Philippines is only exception. The macroeconomic fundemantals in Philippines had been so sound only that the occurrence of a crisis isn’t necessary but is possible. About the second question it was arrived at that “there isn’t a strong, one by one, and negative relation between the severity of the crisis (the cumulative and real economic cost of the crisis) and the macroeconomic soundness”.