University of Liverpool Mexico & South Korea Foreign Exchange Crisis Comparative Essay

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zaz98

Business Finance

University of Liverpool

Description

3000 words essay (+/-10%) Harvard referencing style

do a comparison between two countries one in latin America and a country in Asia

preferably in the last ten years, use facts and graphs and tables and analyze

  1. Font: Times New Roman
  2. Use double spacing and sufficient margins (3-4 cm)
  3. Headings & subheadings font size: 14 points; the rest of the text: 12 points
  4. All pages should be numbered; include a table of content


  • Comprehensive knowledge
  • Detailed understanding of the subject area
  • Extensive background study
  • Highly focussed answer and well structured
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  • No factual/computational errors
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  • Excellent presentation with very accurate communication

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Explanation & Answer

Attached.

i

COMPARISON OF FOREIGN EXCHANGE CRISIS BETWEEN MEXICO AND
SOUTH KOREA

Author

Class Name
Professor
Institution Affiliation
City/State
Date

ii

Contents

Contents ................................................................................................................................ ii
List of tables and figures ...................................................................................................... iii
Introduction ............................................................................................................................1
Causes of Foreign Exchange Crises ...................................................................................2
Justification for Selecting Mexico and South Korea .........................................................4
Basic Economic Indicators of Mexico and South Korea .......................................................6
Impact of Global Recession on Mexico and South Korea .................................................7
Conclusion ...........................................................................................................................13
Reference List ......................................................................................................................14

iii

List of tables and figures
Table 1: Basic indicators of Mexico and South Korea ..........................................................6

Figure 1: GDP growth of Mexico and South Korea between 1990 and 2010 .......................8
Figure 2: Mexican stock exchange monthly evolution ........................................................10
Figure 3: South Korea stock exchange monthly evolution ..................................................11

1

Introduction
Crises in foreign exchange are largely affected by economic crises. The second half
of the 1990s was characterized by several Asian and Latin American countries suffering
from a currency crisis (Nishijima, 2011, p. 2). Although many countries have suffered
economic crises, the cause is usually different. It is these differences that later result to
exchange rate crisis.
After the 1990s economic crisis, countries responded in different ways. For
example, there were market liberations and various policy reforms. Besides, there was also
an increased influx of capital in the emerging markets. Such inflow significantly impacted
on the economic performance of the different countries. Nonetheless, countries that were
excessively dependent on foreign currencies experienced high levels of economic
instability. Economic and currency stability became the inevitable consequence of
currency liberations.
An example of a currency crisis is the Mexican Peso crisis that existed towards the
end off 1994 (Nishijima, 2011, p. 2). Similarly, there were a series of crises in Asia in
1997, in Brazil in 1999, and in Russia in 1998. However, there was no common cause for
these currency crises. Each country had its unique causes and hence unique ways of
addressing the challenges. However, countries that depend on foreign currencies
experienced economic crises that were also affected by the countries in which they
depended.

2

For instance, there is an apparent difference between Latin American countries and
Asian countries in terms of the contagion process. The Brazilian crisis of 1999 had its
severity but did not affect the neighboring countries as much as crises in Asian countries
were contagious in the nearing countries. Consequently, the process of recovery in Brazil
was faster compared to that in Asian countries. This makes it possible to compare and
contrast foreign exchange crises between countries. This paper presents a comparison of
the foreign exchange crisis between Mexico (Latin American country) and South Korea
(Asian country).
Causes of Foreign Exchange Crises
Before discussing the difference in the foreign exchange crisis between Mexico and
South Korea, it is essential to first understand the possible causes of the crises. As has been
discussed, there is no common cause of the crisis and every country has its unique causes
and hence the way in which they mitigate the challenges they are facing. However, there
are general causes of the crisis that can be discussed.
The main cause of a foreign exchange crisis is drastic policy reforms. Many
developing countries and emerging markets have been challenged with the hasty and
dr...


Anonymous
Excellent resource! Really helped me get the gist of things.

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