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Asian financial crisis and Korean trade dynamics

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  • Asian financial crisis and Korean trade dynamics
  • Ratha, Artatrana; Kang, Eungmin
  • St. Cloud State University


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Title Asian financial crisis and Korean trade dynamics
Similar Titles
Material Type Reports
Author(English)

Ratha, Artatrana; Kang, Eungmin

Publisher

[St Cloud]:St. Cloud State University

Date 2012
Series Title; No Economics Faculty Working Papers / 23
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Trade
Economy < Economic Conditions
Economy < Economic System
Holding St. Cloud State University

Abstract

Since the Asian financial crisis in 1997, Korean international trade has gone up substantially in both volume and trade balances. The improvement is largely due to an expansion of international markets through various bilateral trade agreements and the structural changes in Korean exchange rates. This paper investigates the exchange rate – trade balance dynamics, popularly known as the J-curve phenomenon. Employing the Bounds-Testing approach to cointegration and error-correction modeling on Korean bilateral trade for the pre- and postAsian crisis periods, the study finds that support for the strict version of the Jcurves has been fading after the crisis. The weaker version of J-curve is generally supported in both pre- and post-crisis sample periods. There exists a long-run relationship among the Korean exchange rates, domestic income, foreign income, and Korean trading balances.