Fiscal Policy Issues in Korea after the Current Crisis
AbstractThis paper examines fiscal policy issues in the Republic of Korea (hereafter Korea) after the 2009 global financial crisis, including the timing of fiscal policy responses, the effectiveness of expansionary measures, and the long-term implications for government debt. In order to evaluate more accurately Korea’s fiscal response since late 2008, this paper conducts an empirical analysis using historical data from Korea and other countries and derives stylized patterns on counter-cyclicality of fiscal policy and its role in the recovery process. The analysis suggests that Korea’s fiscal stimulus in 2009, while having contributed greatly to the economy’s fast recovery, was unusually large compared with typical fiscal responses during economic downturns. This paper also investigates whether the rapid increase in Korea’s fiscal debt burden is admissible in terms of long-term sustainability. [ADBI Working Paper 225]
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fiscal policy; Republic of Korea; global financial crisis; expansionary measures; economic;
Other versions of this item:
- Hong, Kiseok, 2010. "Fiscal Policy Issues in Korea after the Current Crisis," ADBI Working Papers 225, Asian Development Bank Institute.
- E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
- H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
- H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-16 (All new papers)
- NEP-MAC-2010-10-16 (Macroeconomics)
- NEP-PUB-2010-10-16 (Public Finance)
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