South Korea’s Economic Policy Response to the Global Financial Crisis

Abstract

The aim of this chapter is twofold. First, it traces how the Republic of Korea (South Korea) has handled the 2008 crisis so far. The first year of the crisis, i.e. September 2008 to September 2009, is taken as the principal reference period. The appropriateness of economic policy measures is its major concern. Second, it searches for some connection between the 1997-8 Asian crisis and the 2008-09 global financial and economic crisis. The first two parts of the chapter traces Korea's economic situation when it faced the crisis and see how Korea was affected by the global financial crisis, which was to turn into a major global economic crisis. It next traces policy responses and shows how they resonated with the performance of the Korean economy. As a fourth step, it looks at the political boundary conditions. The chapter concludes by looking for connections between the two major crisis. Keywords:1997-8 Asian crisis; 2008-09 global financial crisis; economic policy response; political-economic boundary; South Korea