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External Debt and Macroeconomic Performance in South Korea

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  • Susan M. Collins
  • Won Am Park

Abstract

During 1980-1986, South Korea went from being the world's fourth largest debtor country, in the midst of an economic crisis, to a model of successful adjustment, with high growth rates and a current account surplus. This paper summarizes the findings of an in depth analysis of Korea's performance, focusing on the experience with external debt. We argue that the explanations for Korea's recovery are closely linked to the explanations for Korea's very rapid growth during the 1960s and 1970s. The centerpieces have been a comprehensive export focused investment plan with external borrowing wed to supplement domestic savings in financing the investment and an active, interventionist government policy.

Suggested Citation

  • Susan M. Collins & Won Am Park, 1988. "External Debt and Macroeconomic Performance in South Korea," NBER Working Papers 2596, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:2596
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    References listed on IDEAS

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    1. Charles R. Frank Jr. & Kwang Suk Kim & Larry E. Westphal, 1975. "Foreign Trade Regimes and Economic Development: South Korea," NBER Books, National Bureau of Economic Research, Inc, number fran75-1, March.
    2. Rudiger Dornbusch & Yung Chul Park, 1987. "Korean Growth Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(2), pages 389-454.
    3. Charles R. Frank Jr. & Kwang Suk Kim & Larry E. Westphal, 1975. "Appendices to "Foreign Trade Regimes and Economic Development: South Korea"," NBER Chapters, in: Foreign Trade Regimes and Economic Development: South Korea, pages 245-257, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Noppadol Buranathanung & Chaipat Poonpatpibul, 2003. "External Debt Dynamics and Current Account Sustainability," Working Papers 2003-10, Monetary Policy Group, Bank of Thailand.
    2. nz le Kurt, 2019. "The Relationship Economic Complexity and Education Expenditure: A Empricial Analysis on South Korea," International Journal of Economics and Financial Issues, Econjournals, vol. 9(2), pages 73-79.
    3. Nadeem Bhatti & Muhammad Aamir & Namatullah Shah & Muhammad Rahpoto & Faiz Shaikh, 2011. "New Growth Theories and Trade Liberalization: Measurement of Effects of Technology Transfer on Pakistan’s Economy," Modern Applied Science, Canadian Center of Science and Education, vol. 5(3), pages 1-85, June.
    4. Nopphadon Buranathanung & Chaipat Poonpatpibul, 2002. "External Debt Dynamics and Current Account Sustainability," Working Papers 2002-03, Monetary Policy Group, Bank of Thailand.
    5. Jeffrey D. Sachs & Mark W. Sundberg, 1988. "International payments imbalances of the East Asian developing economies," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 32, pages 103-156.
    6. Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, vol. 39(1), pages 31-57, July.

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