ABSTRACT
Localised explanation were plainly inadequate to explain a crash of depth and breath as had engulfed the whole East Asian region by the end of 1997. By the second half of 1998, few commentators considered the crisis a purely East Asian phenomena or even a crisis which could be quarantined to East Asia. Following this sea change in official attitudes, early 1999 saw the first signs of recovery and the latter part of the year saw a return to growth in both domestic economies and regional trade combined with a rapid return of confidence in financial markets. In order to provide this the authors need both a general theory of financial crashes and a specific analysis of how this applied in this crisis. This chapter examines the changes in the US economy brought about by the Great Depression. It is by comparing the Japanese economy with the American economy that we can most clearly see where the problems lie.
