Case study: The collapse of the Thai Baht in 1997.

Identify the main factors that led to the collapse of the Thai baht in 1997. An export fed growth spurt spurred on huge investments in property. This in turn increased property values. An already stressed stock market was further weakened by the collapse of Thailand's major bank (Finance One). This coupled with the unsustainable peg on the baht to the dollar contributed to the collapse. Do you think the sudden collapse of the Thai baht can …

…notice any similarities between the collapse of the Thai baht in 1997 and the collapse of the Korean won around the same time? What are these similarities? Do you think these two events were related? How? The fall of the baht was part of an Asian wide negative trend in economies. The fall of Korea and Thailand were intertwined. As one country lost stability, it turned into a domino effect, which in turn effected other countries.