In the second half of 1997 Thailand, Malaysia, Korea and Indonesia experienced a massive outflow of foreign capital - more than $100 billion. The effects of this rival the worst years of the Latin American debt crisis and the early years of the Great Depression.The Asian crisis demonstrates how interconnected the global economy has become, and this book is the first attempt, by an international group of experts, to understand the Asian financial crisis by taking into account the dynamics of private capital flows. The authors answer some of the most important questions relating to the Asian crisis, and seek to find solutions to prevent such crises occurring again, including:what caused the crisis in Asian countries?why did most analysts fail to anticipate the crisis?why were the effects so severe?what is the key to recovery in Asia and other crisis countries?what can be done to prevent such a crisis from occurring again?how can the international system deal with such circumstances more successfully?Private Capital Flows in the Age of Globalization will be invaluable to policymakers, investors and scholars working in the fields of money, finance and banking, Asian studies, development and international economics.