Economic and Financial Crises in Emerging Market Economies: Overview of Prevention and Management

Martin Feldstein

NBER Working Paper No. 8837
Issued in March 2002
NBER Program(s):   IFM   ME   PE

This is the introductory chapter to an NBER conference volume that examined the lessons to be drawn from the financial and currency crises of the late 1990s. The paper does not attempt to summarize the specific content of that meeting but provides the author's personal conclusions about crisis prevention and management. The first part of the paper deals with policies of the emerging market economies that affect the likelihood of crises, including exchange rate regimes, capital account convertibility, foreign exchange liabilities and reserves, domestic credit structure, and financial supervision. The paper then considers policies of industrial countries that affect the risk of crises in emerging market economies, including exchange rate instability, interest rates, banking supervision, trade policy, and the provision of a lender of last resort facility. The second half of the paper deals with the way that the crises were managed by the IMF and attempts to answer the following questions: (1) Have the crises been resolved, permitting the crisis countries to return to solid economic growth and to achieve renewed access to international capital markets? (2) Did the IMF stabilization policies resolve the crisis with as little economic pain as possible? (3) Did the agreed structural reforms actually occur and, if so, were they successful? (4) How did the experience of the crisis countries affect the incentives of lenders, borrowers, and countries facing crises in the future? (5) Were the actions of the IMF politically legitimate for an international agency? (6) What were the political consequences of the crises and the policies that followed?

download in pdf format
   (130 K)

email paper

This paper is available as PDF (130 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w8837

Published: Feldstein, Martin (ed.) Economic and financial crises in emerging market economies, NBER Conference Report series. Chicago and London: University of Chicago Press, 2003.

Users who downloaded this paper also downloaded these:
Feldstein Economic and Financial Crises in Emerging Market Economies.An Overview of Prevention and Management
Chang and Velasco w6606 Financial Crises in Emerging Markets
Mishkin w8087 Financial Policies and the Prevention of Financial Crises in Emerging Market Countries
Sachs, Tornell, and Velasco w5576 Financial Crises in Emerging Markets: The Lessons from 1995
Corsetti, Pesenti, and Roubini w6833 What Caused the Asian Currency and Financial Crisis? Part I: A Macroeconomic Overview
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us