(a) Explain to what extent the neoclassical growth theory (e.g. Solow Swan model) that emphasize capital accumulation and total factor productivity can explain the East Asian growth ‘miracles' with particular references to the growth experiences of Korea and Singapore. Illustrate your answer with the aid of an appropriate model diagram(s).

(b) Explain using a model of exchange rate determination how speculative attacks occur and trigger a currency crisis and then illustrate using the interest parity condition why high interest rates were required to defend the value of local currency in the Asian financial crisis.