GLOBAL ECONOMIC CRISES IN THE 20TH CENTURY AND LESSONS FOR VIETNAM

Abstract

The research examines the general overview of major financial crises worldwide in the 20th century to answer the question of what creates a large-scale global economic crisis and relates to the potential risks for a crisis nowadays. The study indicates the contexts, causes, happenings/impacts, and measures had been done in three crises: (i) The Great Depression of 1929-1939; (ii) The 1973 oil crisis; (iii) The 1997 Asian financial crisis. From these, lessons and experiences for Vietnam are derived from each crisis. The lessons learned from the 1929-1933 economic crisis highlight that the interconnectedness of different sectors in the economy leads to the vulnerability of the stock market to bubbles, and the need for swift government intervention. Things we learned from the 1973 oil crisis are the importance of having reserves, energy independence, a focus on renewable energy, and a coherent regional strategy. Regarding the 1997 financial and monetary crisis, the lesson drawn is that market liberalization is dangerous, and there is a need for a reliable international financial regulatory mechanism and reducing foreign debt through foreign currency. Additionally, it is necessary to allow for more flexible exchange rates.