To analyze the drastic increase of imbalance of savings and trade in East Asian countries that emerged after 1997, we need to examine the impact of the Asian financial crisis on savings ratio in these countries. The high savings ratio and large foreign reserves in the East Asian countries are a result of defensive reactions against predatory speculation.
3  To be clear: Taking account of financial-stability considerations when formulating monetary policy can be fully consistent with the dual-mandate objectives of fostering full employment and price stability. Consider a traditional setting where the policymaker has a quadratic loss function over deviations of unemployment and inflation from their target levels.