Rebalancing Growth in the Republic of Korea

Joonkyung Ha, Jong-Wha Lee and Lea Sumulong

Macroeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: The current account surplus of the Republic of Korea (henceforth Korea) increased significantly in the immediate recovery period after the 19971998 Asian financial crisis. Since then the surplus has gradually diminished, and from 2006 to 2008, the current account was close to being balanced. Econometric analysis reveals that the effect of exchange rate changes on Korea's trade is not robust during non-crisis periods. Exchange rates only significantly affect trade when observations during crisis periods are included. This suggests that exchange rate adjustments alone will not solve the imbalance issue. Korea's external imbalances are not only caused by external factors; they also reflect internal and policy factors such as : (i) saving-investment imbalances; (ii) export-oriented policies; and (iii) the unbalanced structure of manufacturing and services. These internal imbalances result from domestic distortions and structural imbalances arising from market inefficiencies and public policies. These must be addressed to ensure balanced and sustained economic growth.

Keywords: current account surplus; Asian financial crisis; Korea; saving-investment imbalances; export-oriented policies (search for similar items in EconPapers)
Date: 2010-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://www.eaber.org/node/22753 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 301 [REDIRECT LOOP] Moved Permanently (http://www.eaber.org/node/22753 [301 Moved Permanently]--> https://www.eaber.org/node/22753 [301 Moved Permanently]--> https://www.eaber.org/node/22753 [301 Moved Permanently]--> https://www.eaber.org/node/22753 [301 Moved Permanently]--> https://www.eaber.org/node/22753 [301 Moved Permanently]--> https://www.eaber.org/node/22753 [301 Moved Permanently]--> https://www.eaber.org/node/22753 [301 Moved Permanently]--> https://www.eaber.org/node/22753)

Related works:
Working Paper: Rebalancing Growth in the Republic of Korea (2010)
Working Paper: Rebalancing Growth in the Republic of Korea (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eab:macroe:22753

Access Statistics for this paper

More papers in Macroeconomics Working Papers from East Asian Bureau of Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Shiro Armstrong ().