Question

how did large trade deficits hurt the east asian countries in the mid 1980s? (recall that trade deficits are equivalent to inflows of financial capital from abroad.)

Answer 1

How did large trade deficits hurt the East Asian countries in the mid 1980's? (Recall that trade deficits are equivalent to inflows of financial capital from abroad.) Foreign investors worried about repayment so they began to pull money out of these countries.