A careful review of the Asian crisis in 1997 reveals that despite widespread denunciation, hedge funds and other portfolio investors played only a minor role in the making of the crisis. To maintain financial sector stability, therefore, governments should focus on avoiding inconsistent policies rather than try to identify a ““bad”” class of investors and limit their activities.
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Errata: In the September/October 2016 issue (volume 56 number 5, pages 836 and 849), there was a technical printing error in Figures 1b and 2 of the article by Ajay Raina that resulted in a loss of data on the graphs. This online article contains the restored figures in their original, correct state. The error is regretted.