#Learning Journal “The Business Cycle

When I was a little boy, my father runs a key and locker manufactury factory. It was all so great during my childhood. It seems like all kinds of toys, foods, entertainment I don't need to be just wanted. But that kind of living ends in 1997.

It's the Asian financial crisis. 

While Thailand announced the abandonment of the fixed exchange rate system and the implementation of a floating exchange rate system. The exchange rate of the Thai baht to the US dollar plummeted by 17%, causing other financial markets to become chaos. Under the influence of the fluctuation of the Thai baht, the Philippine peso, the Indonesian rupiah and the Malaysian ringgit have successively become the targets of international speculators. Taiwan suddenly abandoned the Taiwan dollar exchange rate, depreciating 3.46% a day. The South Korean government sought help from the International Monetary Fund to temporarily control the crisis. The crisis also hit the Japanese financial industry, which has invested heavily in South Korea. A series of Japanese banks and securities companies went bankrupt. 

An Economic Trough

During that period, my father has to downsize the business and cut down on the number of staff. And it's not only my father's business got influenced but also the entire country or even Asia got chaos. The unemployment seems to be out of control and the government did not use their monetary policy tools well. The financial crisis had dramatic and immediate effects on the economy. I think it's the first time in my life sawing an economic trough. After that, I began to know that as cold fear gripped financial markets and expectations of further slowdown ensued, firms cut down on investment spending.

A Peak

Before the Asian financial crisis, I think it's a booming economy situation or a peak while everything looks great and my father's business went successfully. During that period, you can see so much positive news on TV. The government tends to increase spending on welfare and healthcare, financial crimes are also rarely being talked.

When was the economy expanding? 

I believe it's a tremendous expanding from 1950 to 1980. The population of Taiwan increased from nearly six million to almost eighteen million, It's triple of the original population. Because of the increasing population, the needs of goods and services have also pushed the economy to a higher level.

When was it contracting?

The 2007-2008 Global Financial Crisis, also known as the 2008 Global Financial Crisis. The central banks in many countries have provided huge amounts of money in the financial market, they cannot stop the financial crisis. In September 2008, the financial crisis began to run out of control and causing the collapse of many large financial institutions or takeover by the government, triggering a recession.