A new analysis of the effects of the Asian crisis of 1997 on emergent markets

This work is devoted to the study of the Asian crisis of 1997, and its consequences on emerging markets. We have done so by means of a phase transition model. We have analyzed the crashes on leading indices of Hong Kong (HSI), Turkey (XU100), Mexico (MMX), Brazil (BOVESPA) and Argentina (MERVAL). We were able to obtain optimum values for the critical date, corresponding to the most probable date of the crash. The estimation of the critical date was excellent except for the MERVAL index; this improvement is due to a previous analysis of the parameters involved. We only used data from before the true crash date in order to obtain the predicted critical date. This article's conclusions are largely obtained via ad hoc empirical methods.