Framed the Asian crisis not as fiscal mismanagement, but as a private debt and currency mismatch bust.

In 1997-98 he was one of the few economists who provided a theoretical and empirical understanding of the Asian Financial Crisis (AFC).

He correctly analyzed how the AFC differed from the previous typical financial crises in emerging markets – like the Latin American debt crisis of the 1980s – that were driven by twin fiscal and current account deficits leading to unsustainable external public debts.

In East Asia instead excesses of the private sectors – especially over-investment by private firms (in part driven by moral hazard as impact and explicit guarantees of private debts were the source of the over-leverage excesses) as well as the over-valuation of currencies deriving from semi-fixed exchange rate regimes were the triggers of unsustainable external private debt accumulation that led to joint currency and balance of payment crises.