Lessons from the 1997 and the 2008 Crises in Korea

Hangyong Lee, Changyong Rhee

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

The Korean economy was hit harder than anticipated by the global financial crisis. In the first phase, large capital outflows led to a severe liquidity strain in the foreign exchange market, resulting in a rapid depreciation of the exchange rate. Then, in the second phase, the contraction of global demand led to a collapse of exports and a sharp decline in economic activity, raising concerns about a full-fledged financial crisis in Korea. This paper describes how the global financial crisis spilled over into the Korean economy and how the Korean government responded to the financial turmoil. It also provides the background and rationale for the Korean government's decisions to adopt specific policy measures. Based on Korean experiences during the 1997 and the 2008 crises, this paper documents the lessons learned from the past two crises and identifies several important policy issues.

Original languageEnglish
Pages (from-to)47-64
Number of pages18
JournalAsian Economic Policy Review
Volume7
Issue number1
DOIs
StatePublished - 2012 Jun 1

Fingerprint

financial crisis
Korea
economy
liquidity
foreign exchange
exchange rate
economic activity
contraction
outflow
market
demand
economics
Global financial crisis
Government
experience
policy
Lessons learned
Financial crisis
Liquidity
Foreign exchange market

Keywords

  • Capital market
  • E65
  • F34
  • Financial crisis
  • Fiscal policy
  • Foreign exchange reserve
  • G28
  • Global financial safety net
  • Monetary policy

Cite this

Lee, Hangyong ; Rhee, Changyong. / Lessons from the 1997 and the 2008 Crises in Korea. In: Asian Economic Policy Review. 2012 ; Vol. 7, No. 1. pp. 47-64.
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Lessons from the 1997 and the 2008 Crises in Korea. / Lee, Hangyong; Rhee, Changyong.

In: Asian Economic Policy Review, Vol. 7, No. 1, 01.06.2012, p. 47-64.

Research output: Contribution to journalArticle

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