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Korean economics financial crisis in 1997

.... of 5.8%. During this time the unemployment rate would rise from 2% before the crisis to 8.1% by March 1999. (Hahm, 2000) As a result, the underlying causes of the crisis would only be discovered once the effects have passed. To fully understand these different causes requires an examination of the various factors that helped mitigate the situation. This will provide the greatest insights as to what were the biggest reasons that caused the crisis to begin and how they helped spread the effects to the rest of Asia.

There are a number of different factors that contributed to the Korean financial crisis the most notable would include: excessive risk taking, increasing interest rates and a sharp devaluation of the currency. All of these three different causes are interconnected in one way or another, as they would work similar to one domino falling on top of another. Where, one situation would lead to another, with even greater consequences. The combination of them together, is what would make the situation so explosive. What happened was; South Korea was having large amount of foreign investment capital flowing into the country. This is significant because as this money was coming in, many