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Asian Recession & 2008 Recession

Why did people believe the difficulties Asian economies were experiencing in 1997-1998 might bring a recessionary gap to the United States?

In dealing with the recession of 2008, why is it important for the Fed and Congress to coordinate monetary and fiscal policy measures?

Solution Preview

People believed that the difficulties Asian economies were experiencing in 1997-98 might bring a recessionary gap to the United States. The financial markets of the Asian Countries and the US are interlinked. A rapid and steep fall in the Asian markets will adversely affect the US markets. Another reason is that US citizens and companies are important investors in the region of Thailand, Indonesia, and South Korea. There are subsidiaries of US companies in these regions and there are investments in securities. Another reason people believed that the problems of Asian countries might bring a recessionary gap to the US is that there was a currency crisis. This was expected to affect US exports, and imports. The value of US dollar was expected to ...

Solution Summary

The Asian and 2008 recession is explained in a structured manner in this response. The answer includes references used.

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