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South Korea’s experience with international capital flows

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  • South Korea’s experience with international capital flows
  • Noland, Marcus
  • Institute for International Economics


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Title South Korea’s experience with international capital flows
Similar Titles
Material Type Articles
Author(English)

Noland, Marcus

Publisher

[Washington, D.C.]:Institute for International Economics

Date 2005-06
Journal Title; Vol./Issue Working Paper Series:vol. 5(no. 4)
Pages 51
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Original Format pdf
Subject Economy < Financial Policy
Holding IIE

Abstract

South Korea’s experience is unparalleled in its combination of sustained prosperity, capital controls, and financial crisis. Over several decades South Korea experienced rapid sustained growth in the presence of capital controls. These controls and the delinking of domestic and international financial markets were an essential component of the country’s state-led development strategy. As the country developed, opportunities for easy technological catch-up eroded, requiring more sophisticated corporate and financial sector decision making. But decades of financial repression had bequeathed a bureaucratized financial system and a formidable constellation of incumbent stakeholders opposed to transition to a more market-oriented development model. Liberalization undertaken in the 1990s was less a product of textbook economic analysis than of parochial politicking. The capital account liberalization program affected the timing, magnitude, and particulars of the 1997–98 crisis. (The rest omitted)