ABSTRACT
It is now commonplace to date the economic crisis in Southeast Asia from July 1997, when the Thai baht was allowed to float and quickly depreciated against the US dollar. It is true that the financial contagion that followed led to collapsing currencies and slumping stock markets across the region, and that the real economic crisis appeared thereafter. But signs of impending problems were evident in several of these economies for some months before. In Thailand, for example, there had been speculative attacks on the currency from around August 1996, which were warded off only with great difficulty by the Thai government. Moreover the balance-of-payments imbalances, which triggered such speculative attacks were clear from early 1996 (see, for example, Ghosh et ale 1996). The first Thai company to miss payments on foreign debt defaulted as early as 5 February. Similarly, in South Korea there were problems evident at least from January 1997, with several chaebols facing difficulties in servicing some of their loans.
