ABSTRACT
The financial crises that erupted in East Asia in 1997 were rooted in excessive debt based on imprudent lending and borrowing. This pattern was especially true of Japan's economy, which developed an equity and asset bubble that burst in 1990. As these debt crises spread to other countries, especially Russia and Brazil, they helped to trigger a sell-off in equity markets worldwide in the summer and early fall of 1998. As a consequence, the volume of world trade decelerated sharply, and global growth was projected to recover only moderately.
