ABSTRACT
In 1998, the worldwide financial crisis, which started with the currency crisis in Thailand, intensified and the world economy deteriorated. The price paid for financial stability is that the East Asian countries and regions have sunk into serious economic recession with a sharp rise in inflation. The Ruble fell sharply in value, and Russia fell into a serious financial crisis, while the Russian economy was on the brink of collapse. In 1998, the main driving force of United State (US) economic growth is the increase in consumer spending, as a result of increases in personal income. As the Asian economy is already mired in deflation, if a credit crunch appears in America, the US economy could easily fall into a vicious cycle of deflation. The economy, which was once proclaimed to be the foremost in the world, is achieving some of the worst results among the western developed countries.
