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Fiscal sustainability and its implication for fiscal policy in Korea

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  • Fiscal sustainability and its implication for fiscal policy in Korea
  • Koo, Chung Mo
  • The Association of Korean Economic Studies


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Title Fiscal sustainability and its implication for fiscal policy in Korea
Similar Titles
Material Type Articles
Author(English)

Koo, Chung Mo

Publisher

[Seoul]:The Association of Korean Economic Studies

Date 2008-12
Journal Title; Vol./Issue The Journal of the Korean Economy:vol. 9(no. 3)
Pages 25
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Financial Policy
Holding AKES

Abstract

A sharp rise in government debt in Korea has followed over years the Asian financial crisis. This paper aims to assess the fiscal performance and test whether the current level of government debt is sustainable for a severely attacked country, namely, Korea. Under the intertemporal budget constraint model, the study tests for fiscal sustainability and examines whether there was any discernible change in the behaviour of government debt following the crisis. It applies the well-known test procedure by Hamilton and Flavin and Trehan and Walsh to the Korean case under study. In a different context, the study also applies the procedure of Campbell and Shiller to the tests of intertemporal budget balance. Their method also allows us to assess whether there was any discernible change in the behavior of government debt following the crisis. (The rest omitted)