East Asia's crisis was relatively long lived because

Question

Quizplus · Accepted Answer

East Asia's crisis was relatively long lived because its financial institutions had encouraged heavy borrowing in dollars. This made them vulnerable to sudden capital outflows when investors became concerned about the region's ability to repay its dollar-denominated debt. The depreciation of local currencies also made it more difficult for borrowers to repay their loans, leading to defaults and bankruptcies. This created a vicious cycle of falling asset prices, declining confidence, and shrinking investment that prolonged the crisis.

East Asia's Crisis Was Relatively Long Lived Because