Compounding financial repression with rigid urban regulations : lessons of the Korea housing market
The objective of this paper is to explore the interactions between financial and urban policies, and their joint impact on the performance of the housing sector during the course of economic development. The central hypothesis is that extended periods of financial repression and the scarcity of mortgage lending have generated significant distortions in the output of the Korean housing sector. In addition, combined with very restrictive urban planning and land use regulations, this financial situation may have led to under-investment in the urban sector of Korea during much of the past two decades. A broader question which is left unaddresssed is whether such distortions and under-investment have been an integral component of the rapid growth policies of other East Asian market economies such as Japan and Taiwan, or what differences there might be. The analysis in the paper progresses from economic growth policies and directed credit to urban outcomes; the key link is the behavior of Korean households.
|Date of creation:||30 Jun 1988|
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- Fumio Hayashi & Takatoshi Ito & Joel Slemrod, 1987. "Housing Finance Imperfections and Private Saving: A Comparative Simulation Analysis of the U.S. and Japan," NBER Working Papers 2272, National Bureau of Economic Research, Inc.
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- 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.
- van Wijnbergen, Sweder, 1983. "Credit policy, inflation and growth in a financially repressed economy," Journal of Development Economics, Elsevier, vol. 13(1-2), pages 45-65.
- Edwin S. Mills, 1987. "Has the United States Overinvested in Housing?," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 15(1), pages 601-616.
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