In the preceding chapter, we examined the 1994 Mexican and 1997 Thai financial crises in some detail because these were two of the most important crises among emerging economies that entered the decade of the 1990s with a policy commitment to reform domestic financial systems and integrate themselves more fully with international financial markets. But the decade of the 1990s was characterized by a spate of financial crises, afflicting many other emerging economies as well. Partly, this may have reflected contagion (spillover effects) from the crises we have studied, for example, those of Argentina in 1995 or of several East and Southeast Asian economies in 1997. But partly, these emerging-economy crises have also been homegrown, for example, the Brazilian crisis of 1999 and the Argentine crisis of 2001–2002. Moreover, the incidence of financial crises has not been restricted to emerging economies. Crises have also occurred among industrial countries (e.g., the Nordic banking crisis that we reviewed in Chapter 26 and the European Exchange Rate Mechanism (ERM) crisis of 1992) as well as transition economies (the Russian crisis of 1998).

What lessons can we draw from the recent spate of financial crises in emerging economies for the central topic of this book: the conduct of domestic macroeconomic policies in emerging economies? To bring together the various themes that we have explored throughout the book, this chapter will attempt to summarize what we may and may not have learned about this issue from the financial turbulence of the 1990s and early 2000s.