The Effects of Demographic Change on Current Account and Foreign Asset Accumulation

Hyo Sang Kim (), Da Young Yang () and Eunjung Kang ()
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Hyo Sang Kim: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] , Building C, Sejong National Research Complex, , 370, Sicheong-daero, , Sejong-si, Korea, https://www.kiep.go.kr/eng/
Da Young Yang: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] , Building C, Sejong National Research Complex, , 370, Sicheong-daero, , Sejong-si, Korea, https://www.kiep.go.kr/eng/
Eunjung Kang: KOREA INSTITUTE FOR INTERNATIONAL ECONOMIC POLICY (KIEP), Postal: [30147] , Building C, Sejong National Research Complex, , 370, Sicheong-daero, , Sejong-si, Korea, https://www.kiep.go.kr/eng/

No 20-36, World Economy Brief from Korea Institute for International Economic Policy

Abstract: The current account surplus of Korea mainly comes from its export-driven trade surplus. The current account surplus can be interpreted as foreign savings for future consumption, which is ultimately accumulated in a net foreign asset position. Net foreign assets can contribute to the current account surplus with income balances such as profits, dividends and interest. Korea has maintained its current account surplus since 1998 due to the demographic structure, but only entered into a net foreign assets surplus country in 2014. Under Korea’s rapid demographic change, it is necessary to construct a positive feedback-loop structure between the current account surplus and net foreign assets.

Keywords: demographic; current account; foreign asset; surplus (search for similar items in EconPapers)
Pages: 5 pages
Date: 2020-12-09
New Economics Papers: this item is included in nep-age, nep-int and nep-opm
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Persistent link: https://EconPapers.repec.org/RePEc:ris:kiepwe:2020_036

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