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What role did expectations play in the Asian currency crisis?

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Answer and Explanation:

The Asian financial crisis started in Thailand, and then quickly spread to neighboring economies. It started as a currency crisis when Bangkok backed by gold the Thai baht by the us dollar, setting in motion a series of downturns of currencies .

Self-fulfilling recession applies to a circumstance, where a financial crisis is not directly caused by unsustainable fundamental economic circumstances or unsuitable government policies, but a result of consumer negative expectations. In other terms, the fear of the recession among creditors made the crash imminent, which happen by their initial expectations.

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