The 1997 Asian Financial Crisis and Aftermath in Thailand

Abstract

This paper examines the lead up and aftermath of the 1997 Asian Financial Crisis in Thailand. The source of the crisis was the financial collapse of Thailand’s currency—the baht. The economy at the time was slowing down and had gained a lot of foreign debt. The attempt to regain the baht’s value failed and resulted in the financial crisis. I examined the responses to the crisis on the path of economic recovery through the lens of Keynesian economic theory. Immediate short-term solutions were put in place to get the economy out of the recession. These plans included new monetary and fiscal policy. Long-term solutions were planned for the future for further economic development and reform.