Facts and Findings on the Statistical Discrepancies of the Korean Balance of Payments

Sangyong Joo
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Sangyong Joo: Sejong University

East Asian Economic Review, 2000, vol. 4, issue 1, 173-195

Abstract: The Korea experienced drastic increases in the statistical discrepancy in balance of payments since 1997. In general, the expansion and complexity of external transactions induced by contributing capital account liberalization has contributed to this fact. The abolition of the export/import approval system seems to have accelerated the mismeasurement and omissions in external transactions. Of course, the influence of currency crisis occurred cannot be ruled out. Among economic factors, Won/dollar exchange rate volatility is found to have significant explanatory power on the magnitude of statistical discrepancy, while exchange rate returns have not. WE interpret this as the demand for relatively safe currency rising in presence of the uncertainty in domestic currency values.

Keywords: Balance Of Payment; Dollar; Capital Flow; Korea (search for similar items in EconPapers)
JEL-codes: F31 F32 (search for similar items in EconPapers)
Date: 2000
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