Question

The crisis in Thailand and its repercussions. What lessons taught regarding globalization? Who paid the price for the crisis?

 

Answer 1

The crisis in Thailand caused by misinterpretation of financial policies. It created shortfall of liquidity in the economy .It was a liquidity crisis that lead to insolvency .Exchange policy was also widely criticised.Exchange rate policy does not shows the stable exchange rate;In thailand rapid increase of food price can be seen ;It shows great unemployement in thailand .country tries to maintain the expenditure but not able to increase the revenue .Decline in deman lead to decline in unemployment because it decrease the productivity or supply if supply will decline therefore employement will also decline.Inspite of having economic crisis country has to do expenditure of social protection that leads to poverty .

Thailand crisis lesson about Globalisation:

*Thailand crisis teach us macroeconomic policy is so important before forming policy it extremely important to understand importance of policy and the risk involved in the formation of policy.

*It also teach us banking and financial institution was not inadequate efficient for its application.

*Another important teaching is a financial sector which is well informed and supervised with a proper capitalisation can reduce the impact of crisis.