At the January 1997 World Economic Forum in Davos, Switzerland, the world’s economic and financial experts looked out across the globe and concluded, as one panelist expressed it, “The Goldilocks recovery [is going] global.” As far as the economic eye could see, these gurus of Goldilocks insisted, world economies would grow neither too little nor too much, but “just right.” At the same time, the International Monetary Fund (IMF) insisted that the next few years would see the most broadly based period of economic growth since the beginning of the twentieth century. The Organization of Economic Cooperation and Development (OECD) chimed in, insisting that for the first time since 1985, all 29 members would enjoy economic growth (see “The Goldilocks Recovery: ‘Just Right’ Is Just Not Right,” IF 1814, 5/16/97).
But when the rarefied air of Davos met the stale air of economic reality, things did not go as planned. Financial trouble was spreading in Asia.