Abstract
By November 1997, shock waves from the financial turmoil in East Asia had reached stock markets in Europe, Latin America, and the United States. Whether investors had come to Asian markets in search of diversification or higher returns, the results were nothing short of disastrous. Not only had Asian share-price indices plummeted by as much as 60 percent in U.S. dollars since the start of the year, but events had revealed substantial linkage between the performance of Asian markets and their counterparts elsewhere. Yet the disillusionment of investors was minor in comparison to the bitterness of East Asian leaders who