DOI link for Economic catastrophe
Economic catastrophe book
Even as the storm clouds of crisis gathered in 1997 and currency traders began to stalk the Indonesian rupiah, there was a widespread belief that the Indonesian economy was well insulated against such challenges. After all, the ‘fundamentals’ used by neo-classical economists to measure economic health were relatively sound. Indonesia ran no large budget deficits, its inflation was low and it maintained manageable current account deficits through strong export growth. In the years leading up to the crisis, most economists and the World Bank had continued to feel confident about Indonesia’s economic prospects, although expressing some concerns about short-term private sector debt and flagging commitment to market reform (Hill, H. 1996: 255; Radelet 1995; World Bank 1996: xxii-xxxii, 1997c: xxi-xxxi).