Contagion in the East: A Look at the 1997–98 Asian Financial Crisis
Grade Level: High School – Community College
In the years leading up to the summer of 1997, Asia seemed to be a promising player in the global economy. Market-watchers and investors in the late 1980s would scarcely have predicted that the developing Asian countries would be fraught with economic problems a decade or so down the road. For the most part, the early hints and warning signals of an impending financial crisis went largely unheeded; this crisis surprised and caught many unprepared. Now, as the Asian economies are steadfastly recovering from the 1997–98 financial crisis, people have taken a step back to pinpoint the lessons. Thus, this retrospective glance becomes a useful intellectual exercise even for the new student in economics.
This curriculum unit will introduce students to a handful of the basics in international economics and help them to understand the events of the 1997–98 Asian financial crisis. With this foundation, students will be better prepared to apply their knowledge of current events and appreciate the economic issues that are featured in the news everyday.
Lesson One introduces students to some basic economic terminology and exchange market mechanisms, and presents a summary of the 1997–98 Asian financial crisis. With a general understanding of the Asian economies and the train of events leading up to the Asian financial meltdown, students will better grasp the implications of economic trends and policies covered in the news. Students will be asked questions designed to gauge their understanding of this crisis. A class newspaper activity has been provided to give them an opportunity to find out more about the Asian financial crisis on the Internet.
Lesson Two focuses on the history and responsibilities of the International Monetary Fund (IMF). Handouts are provided for the teacher and students to read in preparation for a classroom Team Quiz activity. Students will examine the objectives of the IMF. To further solidify their understanding of the IMF and form their own conclusions about its effectiveness, student-groups will be asked to create a one-page brochure summarizing the key points about the IMF.
Lesson Three consists of 2 parts in which the students will apply what they have gleaned from the first 2 lessons. Part 1 is the simulation in which students will be divided into groups representing 10 different East Asian countries and the IMF Executive Board. Each group will prepare a presentation that highlights the key economic strengths and weaknesses of the IMF and the assigned countries. All groups will enact a roundtable discussion that simulates the IMF country-evaluation process. As a final exercise in Part 2, each group will be asked to present a final report on the current economic status of its designated country, post 1997–98 Asian financial crisis.
Each of the activities in this curriculum unit has specific learning objectives listed. The following reflect larger goals for the unit as a whole.
In this curriculum unit, students will:
- study historical, economic, and current events in Asia relevant to the global economy
- develop a curiosity and basic understanding of Asian and world financial markets, economic causes and effects, and the IMF
- gain an awareness and conversational fluency about the domino-effects of financial crises
- familiarize themselves with economic terminology and improve their ability to express opinions about current international events
- learn to work efficiently individually, and in small groups to gather ideas and create a presentation