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Macroeconomic policies in Korea

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Frame of Image ld War II, the nation has been divided into two parts: North Korea and the Republic of Korea. Although some of its industrial base was built during Japanese occupation, most was destroyed during the Korean War of 19501953. After the War, institution building and Korea’s political and economic systems were influenced by American advisors. Until the early 1960s, the Korean economy depended on U.S. aid. Korea’s economic growth from 1954 to 1960 averaged only 3.7%. The turning point of Korea’s economic development came in the 1960s. In 1962, the Korean government launched an ambitious Five-Year Economic Development Plan and promoted labor-intensive light industries such as textiles and plywood, which strongly competed in the international market. The main strategy during this time was export-oriented. Low interest rate policy loans were granted to help export firms facing serious financial difficulties. The Korean government also focused on efficient mobilization and allocation of investment resources. Several specialized banks were established to finance underdeveloped sectors. Throughout the 1960s, exports expanded by almost 40% annually and served as the driving force for growth. Korea registered a high GNP growth rate of 9% per annum. Entering the 1970s, labor-intensive light industries began to lose international competitiveness due to protectionism of domestic products in other developing countries. These circumstances forced the Korean economy to modify its strategic objec


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Title Macroeconomic policies in Korea
Similar Titles
Material Type Reports
Author(English)

Choi, Kyungsoo

Author(Korean)

최경수

Date 2002
Pages 17
Language English
File Type Documents
Original Format pdf
Subject Economy < Macroeconomics
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