Corporate Leverage, Bankruptcy, and Output Adjustment in Post-Crisis East Asia

by Se-Jik Kim

The cutoff of capital inflows that triggered the east Asian crisis in 1997 has been followed by a remarkably wide range of output responses. For example, the real GDP of Indonesia contracted by 14 percent in 1998, whereas for Taiwan Province of China real GDP expanded by 5 percent (Figure 1, top panel). What explains this wide disparity?

60 pages, Kindle Edition

First published October 1, 1999