Identify the main factors that led to the collapse of the Thai baht in 1997.
An export fed growth spurt spurred on huge investments in property. This in turn increased property values. An already stressed stock market was further weakened by the collapse of Thailand's major bank (Finance One). This coupled with the unsustainable peg on the baht to the dollar contributed to the collapse.
Do you think the sudden collapse of the Thai baht can be explained by the purchasing power parity theorem?
The PPP theory suggests that the purchasing power of two companies should be equal. The peg of the…
