The Evolution of Central Banking and Monetary Policy in the Asia-Pacific

The Evolution of Central Banking and Monetary Policy in the Asia-Pacific

Akhand Akhtar Hossain

This book of case studies is a contribution to monetary macroeconomics in which country-specific experience and issues in inflation and monetary policy are reviewed and analysed in an historical context. In doing so, the key ideas and views on the sources and dynamics of inflation and monetary-policy behaviour are investigated after taking into account institutional arrangements for the conduct of fiscal and monetary policies. This book selects for study twelve diverse countries from the Asia-Pacific region including the US, China, Australia, India, Japan, Hong Kong SAR (China), South Korea, the Philippines, Singapore, Sri Lanka, Thailand and New Zealand.

Chapter 7: South Korea

Akhand Akhtar Hossain

Subjects: asian studies, asian economics, economics and finance, asian economics, money and banking


South Korea is one of the major economies of East Asia. Having made impressive economic and social progress since the 1960s, it joined the OECD in 1996. This transformation of the South Korean economy is viewed as a test case in economic development, comparable with the ‘economic miracle’ of the Japanese development ‘take-off’ that preceded it by several decades. South Korea has an ancient history and culture. It is an ethnically homogeneous society with a population size of about 50 million and has one of the highest population densities in the world, averaging about 491 persons per square kilometre. The beginnings of South Korea’s contemporary economic and political history can be traced to the mid 1940s when, as an outcome of the Japanese defeat in World War II, it gained independence from Japan. Since then South Korea’s impressive economic performance and social progress have drawn interest among development economists and policymakers across the globe. Like many developing countries of the Asia-Pacific region, South Korea underwent intermittent, major political upheaval throughout the twentieth century. Having suffered from repression by the Japanese colonial regime for much of the first half of the twentieth century, South Korea was then devastated by a three year-long war with North Korea, 1950–53, which took the lives of 1.2 million people. South Korea has sustained tense political-military relations with North Korea since partition of the Korean Peninsula post-World War II.

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