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on of the financial crisis in the banking industry the seeds of a further decline road. Don't match the final between short-term debt and current assets and regional exchange rate instability is the inevitable result of excessive exposure.

In the heart of the Asian financial crisis, is unsustainable area the commitment of governments open capital account and fixed exchange rate. In a national policy on capital account transactions and exchange rate system of the interdependence between become clearer when people consider foreigners to behavior in any country of the above any capital account transactions (foreign direct investment, investment portfolios and order of bond investment, investment in fixed assets and loan), investors have to convert into money country, they seek investment (that is, senator) currencies (i.e. dollars). This is the concept of foreign exchange reserves useful.

For a country to international business, the central bank must keep enough hard currency, when investors decided to cancel their money, or recovery of the loans, to promote local currencies into hard currency reserves. For a country's exchange rate is a value of its monetary demand function, the foreign investment or withdraw, direct effect. But in a country like Malaysia maintained its commitment to the central bank stable exchange rate and rules revaluation, massive capital inflows into a in the domestic money supply increase, lead to doubts underestimate and inflation pressures. In contrast, the capital of the outflow of a stage.

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The New England journal of medicine public policy

In Malaysia, the massive capital inflows in the first half of the year to create underestimate senator view the1990s. This view more conducive to capital inflows, as investors guessing the higher rate of revaluation prospects. Instead, Malaysia maintained its commitment to the central bank, just allow domestic money supply growth and the increase of capital inflows, the result is in real estate and stock market excess investment and asset/stock market bubble. The chain of events to start with the capital flight, due to excessive inflation economic doubts and continue to heavy speech on the value of the foreign speculative. DangYang done trying to, in order to support its currency failure, depreciation is the only choice, leading to the financial crisis and the deep recession.

Macroeconomic policy autonomy

Because of the bretton woods institutions building great master, John MaynardKeynes see "financial market speculation, and for national policy autonomy may be the constraints of the driver. Therefore, he basically that capital controls in the 80 s and 1970 s, Malaysia has not yet revealed its short-term securities investment capital market", policymakers in macroeconomic policy design enjoy the freedom dominate. For example, the government of 1980 s, commodity prices plummeted in the domestic infrastructure project investment and running the budget deficit. This expansionary policies keep employment levels and protection of the devastating economic entity of the future of the economic recession. In contrast, the 1980 s introduced to reduce the appeal of fiscal policy as macroeconomic management tools of the NDP happen policy shift. According to the U.S. Treasury, the world bank group and the international monetary fund's top decision makers, excessive public spending is inefficient and possible market distortion本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。