Preface to the Second Edition
Page ix Preface to the Second Edition The first edition of Financial Crises and Recession in the Global Economy was published in 1994. In the five years since then, additional economic crises have occurred. This Second Edition adds a detailed account of the Mexican crisis of 199495, the Japanese crisis which began in 1989 but worsened in the late 1990s, and the Asian crisis which hit in 1997. Academic and journalistic literature and policymakers themselves increasingly acknowledge the risk and severity of these types of episodes. More systemic and thorough explanations are sought, which increasingly identify the importance of financial globalization processes. When the first edition was published, a member of the US Federal Reserve Board concluded (in Choice magazine, January 1995) that the author 'grossly overstates [that financial globalization] is the principle cause and explanation of various events that Allen exaggeratedly refers to as crises'. Yet now, in light of recurring and persistent episodes, more policymakers and others admit economic 'crisis' into their thinking and lexicon. For example, the International Monetary Fund now concludes that approximately threequarters of its more than 180 member countries had encountered 'significant' banking sector problems between 1980 and 1995, onethird of which warrant the definition 'crisis' (Lindgren et al., 1995). The nature and causes of recent economic crises are increasingly debated, but there is very little consensus. To help in this regard, this Second Edition provides a more thorough taxonomy of the 'common patterns'. Also, it formalizes 'a new political economy...
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