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Economic coupling mechanism between Korea and U.S.

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Frame of Image  coupling between Korea and the U.S. has increased considerately. In this paper, the mechanism of economic coupling between Korea and the U.S. is examined through possible paths. After looking at the possibility of a U.S. recession, the countermeasures to minimize the effect of a U.S. shock are investigated. ken into the three following paths for analysis; inter national trade, the exchange rate, and the financial market - See <Figure 1>. The first path is international trade1); When the U.S. recession occurs, total imports of U.S. goods decreases. It has a negative effect on the world economy includi n g Korea. The second path is through the exchange rate; a U.S. recession depreciates its curr e n c y . The devaluation of the U.S. currency reduces the profits which Korean companies earn through their exports to the U.S. The final path is through the financial market. As the financial markets become more globalizing, there is a genuine increase in the degree of integration among t h e world stock markets (Ayuso and Blanco, 2001)2). In this sense, U.S. stock market slump effects on the Korean stock market as a same direction3). With respect to economic growth rates, the economic coupling phenomenon between Korea and the U.S. becomes distinct after the financial crisis of 1997 - See <Figure 2>.
2. Coupling Mechanism
The effect of the U.S. economy on Korea is bro-
1) The previous researches for the relationship between U.S. and world economy via international trade are the follo


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Title Economic coupling mechanism between Korea and U.S.
Similar Titles
Material Type Reports
Author(English)

Kim, Jin Woong

Publisher

[Seoul]:Korea Institute for Industrial Economics & Trade

Date 2007
Journal Title; Vol./Issue KIET Industrial Economic Review:vol. 12(no. 4)
Pages 9
Subject Country United States(Americas)
South Korea(Asia and Pacific)
Language English
File Type Documents
Original Format pdf
Subject Economy < Economic Administration
Holding KIET; KDI School

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