Macroeconomic Impacts of the Korean Financial Crisis: Comparison with the Cross-country Patterns
This paper analyzes the macroeconomic adjustment process of the Korean financial crisis in a broad international perspective. In particular, the impacts of the crisis on GDP growth, inflation, current account balance, and employment are analyzed using a cross country data set, which compiled 150 financial crisis episodes from all developing countries that have received conditional financial assistance from the IMF over the period from 1973 to 1994. The cross country patterns show that GDP growth rates sharply drop with the eruption of a crisis but then recover quickly to the precrisis level in two or three years, showing a v pattern of adjustment; inflation and current account deficit exhibit an inverse vpattern, but they do not improve to the level of nonprogram period; employment growth is most sluggish in the recovery process compared with other macroeconomic variables. We find that the Korean case is in general consistent with these stylized patterns. However, the degree of initial contraction and following recovery has been far greater in Korea than what the crosscountry evidence predicts. Crosscountry comparison indicates that both the exportoriented structure and the swift adjustment of macroeconomic policies contributed to the speedy adjustment of the Korean economy.
(This abstract was borrowed from another version of this item.)
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 25 (2002)
Issue (Month): 4 (04)
|Contact details of provider:|| Web page: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920|
|Order Information:||Web: http://www.blackwellpublishing.com/subs.asp?ref=0378-5920|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- International Monetary Fund, 1998. "Do IMF-Supported Programs Work? a Survey of the Cross-Country Empirical Evidence," IMF Working Papers 98/169, International Monetary Fund.
- Frankel, Jeffrey A. & Rose, Andrew K., 1996.
"Currency crashes in emerging markets: An empirical treatment,"
Journal of International Economics,
Elsevier, vol. 41(3-4), pages 351-366, November.
- Jeffrey A. Frankel & Andrew K. Rose, 1996. "Currency crashes in emerging markets: an empirical treatment," International Finance Discussion Papers 534, Board of Governors of the Federal Reserve System (U.S.).
- Tony Killick, 1995. "Can the IMF Help Low-Income Countries? Experiences with its Structural Adjustment Facilities," The World Economy, Wiley Blackwell, vol. 18(4), pages 603-616, 07.
- Eric Friedman & Simon Johnson & Peter Boone & Alasdair Breach, 1999.
"Corporate Governance in the Asian Financial Crisis,"
Departmental Working Papers
199920, Rutgers University, Department of Economics.
- Johnson, Simon & Boone, Peter & Breach, Alasdair & Friedman, Eric, 2000. "Corporate governance in the Asian financial crisis," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 141-186.
- Simon Johnson & Peter Boone & Alasdair Breach & Eric Friedman, 1999. "Corporate Governance in the Asian Financial Crisis," William Davidson Institute Working Papers Series 297, William Davidson Institute at the University of Michigan.
- Louis Dicks-Mireaux & Miguel A. Savastano & Adam Bennett & MarÃa Vicenta Carkovic S. & Mauro Mecagni & James John & Susan Schadler, 1995. "IMF Conditionality; Experience Under Stand-by and Extended Arrangements, Part I: Key Issues and Findings," IMF Occasional Papers 128, International Monetary Fund.
- Borensztein, Eduardo & Lee, Jong-Wha, 2002.
"Financial crisis and credit crunch in Korea: evidence from firm-level data,"
Journal of Monetary Economics,
Elsevier, vol. 49(4), pages 853-875, May.
- Jong-Wha Lee & Eduardo Borensztein, 2000. "Financial Crisis and Credit Crunch in Korea; Evidence From Firm-Level Data," IMF Working Papers 00/25, International Monetary Fund.
- Jong-Wha Lee & Changyong Rhee, 1999.
"Social Impacts of the Asian Crisis: Policy Challenges and Lessons,"
Working Paper Series
no2, Institute of Economic Research, Seoul National University.
- Jong-Wha Lee and Changyong Rhee, 1999. "Social Impacts of the Asian Crisis: Policy Challenges and Lessons," Human Development Occasional Papers (1992-2007) HDOCPA-1999-02, Human Development Report Office (HDRO), United Nations Development Programme (UNDP).
- Vittorio Corbo & Stanley Fischer, .
"Structural Adjustment, Stabilization and Policy Reform: Domestic and International Finance,"
Documentos de Trabajo
170, Instituto de Economia. Pontificia Universidad Católica de Chile..
- Corbo, Vittorio & Fischer, Stanley, 1995. "Structural adjustment, stabilization and policy reform: Domestic and international finance," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 44, pages 2845-2924 Elsevier.
- Carmen M. Reinhart & Graciela L. Kaminsky, 1999.
"The Twin Crises: The Causes of Banking and Balance-of-Payments Problems,"
American Economic Review,
American Economic Association, vol. 89(3), pages 473-500, June.
- Reinhart, Carmen & Kaminsky, Graciela, 1999. "The twin crises: The causes of banking and balance of payments problems," MPRA Paper 14081, University Library of Munich, Germany.
- Graciela L. Kaminsky & Carmen M. Reinhart, 1996. "The twin crises: the causes of banking and balance-of-payments problems," International Finance Discussion Papers 544, Board of Governors of the Federal Reserve System (U.S.).
- Steven Radelet & Jeffrey D. Sachs, 1998. "The East Asian Financial Crisis: Diagnosis, Remedies, Prospects," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(1), pages 1-90.
- Mohsin S. Khan, 1990. "The Macroeconomic Effects of Fund-Supported Adjustment Programs," IMF Staff Papers, Palgrave Macmillan, vol. 37(2), pages 195-231, June.
- Jeffrey D. Sachs, 1985. "External Debt and Macroeconomic Performance in Latin America and East Asia," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 16(2), pages 523-573.
When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:25:y:2002:i:4:p:539-562. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.