Difference between East Asian 1997 Crisis and East Europe 2008 crisis

Ajai Chopra of IMF has a superb post comparing the East Asian Crisis 1997 and East Europe Crisis 2008.

When the global financial crisis spread to emerging Europe in the last quarter of 2008, memories of the Asian crisis of the late 1990s sprang back to life. Would emerging Europe face the same chaotic currency depreciations, mass defaults of banks and companies, double-digit output losses and social unrest that beset many Asian countries back then? 

Nine months into the crisis, it is clear that emerging Europe as a whole is not following Asia’s script. But it is also clear that the crisis is evolving differently across countries. 

The Baltic countries (Estonia, Latvia and Lithuania) are suffering output declines that already exceed those of the Asian crisis (see chart below). 

By contrast, a milder version of the crisis is unfolding in central Europe (by which I mean the Czech Republic, Hungary and Poland, commonly referred to as the CE3) despite a much deeper global downturn than what we saw during the Asian crisis.

He then explains why Baltics have declined sharper than CE3 (better macro fundamentals what else) and how CE3 were saved (floating exchange rates, west Europe banks continued with credit lines, external assistance).

It gives you a snapshot on East Europe economies in one go.

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