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Decrease in the growth of domestic demand in Korea
| Title |
Decrease in the growth of domestic demand in Korea
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|---|---|
| Material Type | Article |
| Author(English) |
Moon, Seongman |
| Publisher |
[Sejong] : Korea Institute for International Economic Policy |
| Date | 2015-12 |
| Journal Title; Vol./Issue | Journal of East Asian Economic Integration:vol. 19(no. 4) |
| Pages | 28 |
| Subject Country | Eastern Asia(Asia and Pacific) South Korea(Asia and Pacific) |
| Language | English |
| File Type | Documents |
| Original Format | |
| Subject | Economy < Trade Economy < Economic Conditions |
| Holding | Korea Institute for International Economic Policy |
| License |  |
Abstract
This paper investigates a link between the significant decline in the growth of domestic demand and the dampened ripple effects from the export sector in Korea since the East Asian financial crisis. The dampened ripple effects are closely linked to the changed investment behaviors of the Korean large-sized exporting firms since the crisis: they do not invest in their export earnings any more to create new industries; they tend to use more foreign value added contents for their exports and to increase outward direct investment by actively participating in global value chains. The paper also examines a link between the growth of domestic demand and the growth of household disposable income and presents reasons for the decline in the growth of household disposable income since the East Asian financial crisis.
User Note
This paper is developed from Chapter 2 of 2015 KIEP Annual Report, “Why has Korean economic growth and domestic demand slowed down since the Asian financial crisis?”. The author wishes to thank the anonymous referees and the Editor for helpful comments and suggestions which substantially improved our paper. This paper was supported by research funds of Chonbuk National University in 2015.
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