Show Less

The Korean Economy Beyond the Crisis

Edited by Duck-Koo Chung and Barry Eichengreen

Providing an integrated analysis of the event and its consequences, the chapters in the book consider the causes of the crisis, the response of the US government and International Monetary Fund, adjustments in the Korean monetary and fiscal policies, and the success of financial and corporate restructuring. The concluding chapters bring the story up-to-date, describing the aftermath of the crisis and assessing whether there has been sufficient reform to facilitate the country’s recovery and growth.
Buy Book in Print
Show Summary Details
You do not have access to this content

Chapter 14: Reform and the risk of recurrence of crisis

In June Kim, Baekin Cha and Chi-Young Song


In June Kim, Baekin Cha and Chi-Young Song INTRODUCTION A large number of studies have sought to determine the roles of domestic and international factors in the currency and banking crises experienced in East Asian countries, including Korea, in 1997. These studies can be usefully classified into three groups. The first one stresses structural weaknesses in the corporate and financial sectors, misguided economic policies, and deteriorating macroeconomic fundamentals (see for example Corsetti et al., 1998b; Fischer, 1998b; Lane et al., 1999). The second emphasizes the instability of international capital markets, as panicked creditors withdrew their short-term loans to East Asian borrowers (see Radelet and Sachs, 1998; Feldstein, 1998; Stiglitz, 1999). A final group of studies emphasizes the contagious nature of the crisis as it spread from Southeast Asia to Korea (Kaminsky and Schmukler, 1999; Park and Song, 2001b). More analysis is needed to determine the explanatory power of these competing views, but many observers will agree that all three sets of factors played some role in Korea’s crisis. The Korean government approached the International Monetary Fund (IMF) for assistance in November 1997 when it was unable to stem the outflow of capital and the depreciation of the won. Since the IMF considered structural weaknesses to be at the root of the country’s crisis, it made the provision of assistance conditional on structural reform. In concert with the Fund, the Korean government implemented a wide range of reforms, including financial and corporate restructuring and further deregulation of the capital...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.

Further information

or login to access all content.