BENZER KRİZLER FARKLI COĞRAFYALAR MEKSİKA VE GÜNEY KORE

Abstract

In this paper, the financial crises of Mexico (1994-95) and South Korea (1997) are analyzed. The similarities and dissimilarities among the two financial crises are evaluated by comparing the quantitative data. First of all, we have tried to discuss some of the indicators constructed to forecast financial crises. However, we have used these indicators as supplementary tools for understanding the crises, rather than as predictors. Secondly, our quantitative analyses primarily focus on the dynamics of capital movements. The findings of this study on the financial crises of Mexico and South Korea underline some similarities. The Mexican crisis emerged at a time when Mexico, as a country that established financial discipline and reduced inflation substantially, was considered as “successful”. And as for South Korea –a country that sustained stable growth for many years, with no public deficit and stable prices and a current account surplus– it could not avoid a boom-bust cycle, and was drawn into a crisis. In these two experiences, the rapid increase in capital –especially “hot money”- inflows caused by non-residents was an important factor of instability. In these two experiences, the rapid increase in capital –especially “hot money”- inflows caused by non-residents was an important factor of instability. Accordingly, when such inflows suddenly turn into outflows, they trigger off financial crises. Thus, we arrive at the conclusion that short term arbitrage-seeking speculative capital movements played a decisive role in two financial crises.