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Policy Analyses
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Korea's Pacific Economic Cooperation Diplomacy: Direction and Strategy
Recently, the international economic order has faced some challenges. Multilateral agreements pursuing liberalization and multilateralism have been plunged into confusion due to regionalism and protectionism, threatening the inter..
Co-authors Date 2002.10.23
Economic cooperationDownloadContentSummaryRecently, the international economic order has faced some challenges. Multilateral agreements pursuing liberalization and multilateralism have been plunged into confusion due to regionalism and protectionism, threatening the international financial system. In addition, contrary to expectations, the Asia Pacific Economic Cooperation (APEC) has not produced substantial results. In addition, there have been some movements toward strengthening economic cooperation among Asian countries after financial crisis. Accordingly, Korea should re-identify its policy response for economic cooperation in accordance with global and international trends. -
Trade Policy of the Bush Administration
After 8 years of Clintons Democratic administration, a Republican administration took office in Washington, DC in 2001. The first question proposed in this study is whether partisan changes in the US administration affect US forei..
Moonsung Kang et al. Date 2002.10.20
Trade policyDownloadContentSummaryAfter 8 years of Clintons Democratic administration, a Republican administration took office in Washington, DC in 2001. The first question proposed in this study is whether partisan changes in the US administration affect US foreign trade policy. This paper finds that several policies have been implemented with bipartisan support despite a different political party taking office at the White House. Those policies are (1) strengthening the multilateral trade system, and (2) fair trade. However, the Democratic and Republican parties have different views on various other trade issues. For instance, the Democratic Party negatively evaluates the current globalization process, while the Republican Party has a partially positive view of WTO-based globalization. In addition, the Democratic Party is eager to link trade issues with a social agenda such as labor and environment, but the Grand Old Party opposes forming such linkages, arguing that doing so infringes on the basic philosophy of free trade. (The rest is omitted.) -
Culture and Trade in the APEC -Case of Film industry in Canada, Mexico and Korea-
The cultural industry in general and the film industry in particular have increasingly become a moot subject in the international community. So far, there has been no discussion on the issue of trade and investment liberalization ..
Byung-il Choi Date 2002.10.01
Trade policy, Industrial policyDownloadContentExecutive Summary
I. Introduction
II. International Rules on Trade in Culture
A. Rules from trade perspective
B. Cultural diversity: cultural perspective
III. Film industry policy and trade: Canada, Mexico and Korea
A. Canada
B. Mexico
C. Korea
IV. Screen quota and Trade Liberalization: Case of Korea
A. Screen quota and Korea-US Bilateral Investment Treaty Negotiations
B. Negotiations perspective
C. Stakeholders and their interests
V. Policy Implications to the APEC
ReferencesSummaryThe cultural industry in general and the film industry in particular have increasingly become a moot subject in the international community. So far, there has been no discussion on the issue of trade and investment liberalization of the cultural sector at the APEC. This situation casts an interesting contrast to the WTO where the negotiations on liberalizing the film industry nearly broke off the latest multilateral trade negotiations, the Uruguay Round. The ongoing WTO new round, referred to as the Doha Development Agenda negotiations, is expected to take up the thorny issue again. The WTO negotiations would present challenge to the APEC in the cultural industry. (The rest is omitted.) -
Update on Korean Economic Reforms and Issues in Korea's Future Econonmic Competitiveness
Korea has made extensive reforms after the financial crisis of 1997~1998, some of which had been documented in various books and papers. However, most of those books and papers were written at the height of the financial crisis, ..
Junsok Yang Date 2002.10.01
Economic reformDownloadContentExecutive Summary
I. Introduction
II. Recovery of the Korean Economy after the Financial Crisis
III. Issues in Korea's Long Term Competitiveness
IV. Conclusion
ReferencesSummaryKorea has made extensive reforms after the financial crisis of 1997~1998, some of which had been documented in various books and papers. However, most of those books and papers were written at the height of the financial crisis, and some of the latest details are missing from those books and papers. (The rest is omitted.) -
Korean Crisis and Recovery
Four years after the outbreak of the Asian economic crisis and three and one-half years after the beginning of the IMF program with Korea, the International Monetary Fund (IMF) and the Korea Institute for International Economic Po..
David T. Coe et al. Date 2002.09.30
Financial crisisDownloadContentContents
Foreword
Acknowledgments
Contributors and Participants
1. Introduction / David T. Coe and Kim, Se-Jik
2. From Crisis to Recovery in Korea: Strategy, Achievements, and Lessons / Ajai Chopra, Kenneth Kang, Meral Karasulu, Hong Liang, Henry Ma, and Anthony Richards
3. What Have We Learned from the Korean Economic Adjustment Program? / Cho, Yoon Je
Comments on Papers 2 and 3
Barry Eichengreen
Lee, Jang-Yung
4. New Evidence on High Interest Rate Policy During the Korean Crisis / Chung, Chae-Shick ; Kim, Se-Jik
5. Falling Profitability, Higher Borrowing Costs, and Chaebol Finances During the Korean Crisis / Anne O. Krueger ; Yoo, Jungho
Comments on Papers 4 and 5
Chung, Myung-Chang
Bijan B. Aghevli
6. Corporate Restructuring and Reform : Lessons from Korea / William P. Mako
7. The Role of Corporate Bond Markets in the Korean Financial Restructuring Process / Gyutaeg Oh and Changyong Rhee
Comments on Papers 6 and 7
Simon Johnson
Cho, Won-Dong
8. The Korean Labor Market : The Crisis and After / Kim, Dae Il
9. Corporate Governance and Corporate Debt in Asian Crisis Countries / Eric Friedman, Simon Johnson, and Todd Mitton
Comments on Papers 8 and 9
Jang, Hasung
Zia Qureshi
10. Economic Growth in East Asia Before and After the Financial Crisis / Robert J. Barro
11. Recovery and Sustainability in East Asia / Park, Yung Chul ; Lee, Jong-Wha
Comments on Papers 10 and 11
Charles Adams
Kim, Yong Jin
12. Restructuring Korean Banks' Short-Term Debts / Kim, Woochan ; Byeon, Yangho
13. Strengthening the International Financial Architecture : Open Issues, Asian Concerns / Barry Eichengreen
14. A Framework for Exchange Rate Policy in Korea / Michael Dooley; Rudi Dornbusch ; Park, Yung Chul
Comments on Papers 12,13, and 14
Anne O. Krueger
Kim, Jun Il
Conference Program
SummaryFour years after the outbreak of the Asian economic crisis and three and one-half years after the beginning of the IMF program with Korea, the International Monetary Fund (IMF) and the Korea Institute for International Economic Policy (KIEP) jointly sponsored a conference on the Korean crisis and recovery. The conference was held at the Shilla Hotel in Seoul on May 17-19, 2001.The objective of the conference was to distill lessons from the Korean economic crisis and recovery, and the policies adopted by the government with support from the international community. The timing of the conference, coming after the three-year Stand-By Arrangement with the IMF ended on December 2, 2000, and following two years of remarkable economic recovery from the crisis, seemed appropriate for such an assessment. The conference brought together Korean and non-Korean economists with Korean policymakers and IMF and World Bank staff, some of whom were involved in designing and implementing the Korean program. Holding the conference in Seoul, with broadly equal participation by Koreans and non-Koreans, was considered essential to ensure that Korean perspectives on the crisis were well represented. -
Korea's FTA Policy: Focusing on Bilateral FTAs with Chile and Japan
A free trade agreement (FTA) eliminates tariffs and alleviates non-tariff barriers (NTBs), stimulating trade for member nations while limiting imports from non-member nations at the same time. In an effort to avoid the negative ef..
Inkyo Cheong Date 2002.09.05
Trade policy, Free tradeDownloadContentExecutive Summary
I. Introduction
II. Background of Korea's FTA Policy
III. Current Progress of Korea's FTAs
1. Korea-Chile FTA
2. Korea-Japan FTA
3. FTAs with Other Nations
IV. A Korea-Chile FTA: Korea's First FTA?
V. Expected Effects of a Korea-Japan FTA
VI. Conclusion
ReferencesSummaryA free trade agreement (FTA) eliminates tariffs and alleviates non-tariff barriers (NTBs), stimulating trade for member nations while limiting imports from non-member nations at the same time. In an effort to avoid the negative effects of exclusion from such agreements, to maintain economic reform and an open policy, and to actively cope with proliferating regionalism, the Korean government has decided to pursue FTAs with other nations. Forming FTAs will enable Korea to create political allies, attract foreign investment, and establish overseas footholds, as well as allow Korean companies to secure foreign export markets and overcome discriminatory practices under other FTAs. (The rest is omitted.) -
A Dynamic Analysis of the Korea-Japan Free Trade Area: Simulations with the G-Cubed Asia-Pacific Model
The discussion of an FTA between Korea and Japan began in 1998 and led many research institutions to conduct studies on the economic effects of the FTA. The most prominent one is a joint study between the Korea Institute for Inter..
Warwick J. McKibbin et al. Date 2002.08.15
Free tradeDownloadContentSummaryThe discussion of an FTA between Korea and Japan began in 1998 and led many research institutions to conduct studies on the economic effects of the FTA. The most prominent one is a joint study between the Korea Institute for International Economic Policy (KIEP) and Japan's Institute of Developing Economies (IDE), which was commissioned by the governments of Korea and Japan. (The rest is omitted.) -
Trade Integration and Business Cycle Co-movements: the Case of Korea with Other Asian Countries
As Korea increases its trade within Asia, it is becoming more and more integrated with the other economies in the region. Theoretically, increased trade can lead business cycles across trading partners to be patterned in either di..
Kwanho Shin et al. Date 2002.08.10
Trade structureDownloadContentExecutive Summary
I. Introduction
II. Trade Patterns and Business Cycle Co-Movements
III. Data and Statistical Findings
IV. Methodology and Results
V. Policy Coordination and Business Cycle Co-Movements
VI. Conclusion
ReferencesSummaryAs Korea increases its trade within Asia, it is becoming more and more integrated with the other economies in the region. Theoretically, increased trade can lead business cycles across trading partners to be patterned in either direction, towards convergence or divergence. By using the data for twelve Asian economies, this paper finds that intra-industry trade is the major channel by which the business cycle of Korea becomes synchronized with that of other Asian economies, although increased trade itself does not necessarily lead to close business cycle coherence. -
Korea's FDI Outflows: Choice of Locations and Effect on Trade
According to a formal model for choice of locations for Korea's FDI stock, market size and growth in real GDP significantly cause a positive effect on location of FDI, while the real GDP per capita and distance variables turn out ..
Chang-Soo Lee Date 2002.07.05
Overseas direct investmentDownloadContentExecutive Summary
I. Introduction
II. Literature Review
III. Determinants of FDI Outflows
IV. FDI's Effect on Trade: Empirical Test
V. Summary and Concluding Remarks
Appendix. FDI Outflows in 1991-1994 and 1997-1999
ReferencesSummaryAccording to a formal model for choice of locations for Korea's FDI stock, market size and growth in real GDP significantly cause a positive effect on location of FDI, while the real GDP per capita and distance variables turn out to cause negative effects on FDI. In particular, the negative effect of real capita GDP on FDI implies that Korean overseas production has little relation to high-income consumers and products. We can find changes in patterns of choice of location after the Asian financial crisis; in the early 1990s, the motivation behind FDI was to seek low cost labor in declining industries, but by the late 1990s, the main factor driving FDI was the globalization of businesses in the large conglomerate sector. In addition, the insignificance of human capital abundance, technology level and tax rates means that institutional and policy-related variables such as transparency and pro-FDI policy might be more important than those variables. (The rest is omitted.) -
Hanging Together: Exchange Rate Dynamics between Japan and Korea
Japan and Korea are close countries in terms of economic interaction as well as geography. To quantify the impact of changes in the yen/dollar exchange rate and Japanese industrial production on the Korean economy before and after..
Sammo Kang et al. Date 2002.06.25
Economic cooperation, Financial crisisDownloadContentExecutive Summary
I. Introduction
II. Economic Interdependence between Japan and Korea
1. Co-movement of the Business Cycles
2. Co-movement of Exchange Rates
III. Empirical Tests
1. Some Basic Statistical Relations
2. Stationarity Test and VAR Impulse Response Analysis
3. Variance Decomposition
IV. Conclusions
Appendix
ReferencesSummaryJapan and Korea are close countries in terms of economic interaction as well as geography. To quantify the impact of changes in the yen/dollar exchange rate and Japanese industrial production on the Korean economy before and after the crisis in 1997, the sample period is divided into two sub-periods and then the causal relationships are examined by using vector autoregression analysis. Our estimates show that while the response of Korean industrial production to changes in the yen/dollar exchange rate is not significant during the pre-crisis period, it becomes significant during the post crisis-period. The forecast error variance decomposition also confirms that the yen/dollar exchange rate shocks have almost negligible explanatory power with regards to Korean industrial production during the pre-crisis period, but they have some significance for the post-crisis period. These empirical results show that the free floating exchange rate regime adopted since the crisis cannot insulate the Korean economy from external nominal shocks such as the yen/dollar exchange rate shocks.
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