Korean Economic Crisis Research Articles

Investigating the causal relationship between economic growth, inflation, and unemployment in South Korea

Policymakers and economists consistently implement monetary and fiscal policy to control economic growth, inflation, and unemployment due to the fact that these three factors directly influence people’s living standards. Every country has a different economic characteristic structure. Economic growth and inflation have a strong correlation in some countries, while other countries have a strong correlation between economic growth and unemployment. Therefore, investigating the causal relationship among economic factors can provide us with a better understanding of how economic phenomena affect each other. In South Korea, economic growth, inflation, unemployment have been in balance since the 1998 Korean economic crisis. Hence, investigating the economic growth, inflation, and unemployment of South Korea will enlighten how these three economic indicators affect each other in a country that developed rapidly and had several economic crises. To investigate such a model, the Vector Autoregressive Model (VAR) is used with the data between the years 1980 and 2019 in order to verify whether Okun’s law or/and the Philips curve hold in South Korea. The research also determines if there is either a bi-directional or uni-directional relationship if economic growth, inflation, and unemployment have a causal relationship. The research demonstrates that GDP is the main factor in South Korea that influences the other economic factors. This research paper can contribute to academia, since it has a vital outcome which shows that the mobility of the unemployment rate in South Korea is directly correlated to the movement of GDP.

Problems and Prospects for the DPRK’s Development: Forecasting Model-2021

Since the 1990s, there have been many publications predicting an imminent "collapse of the North Korean regime" or a shift of the country’s political vector. However, this has not happened so far, and the DPRK’s political regime continues to exist. What leads to such chronically unrealistic forecasts for North Korea, and what are alternative options for the future of this country in the short and medium term? Revising a number of unfulfilled predictions, the authors try to explain the reason for these failures. They are usually closely related to an ideological framework, lack of information and dependence on certain sources, which leads to an underestimation of the DPRK's capabilities and misinterpretation of data, when any event is seen as a sign of the regime’s imminent collapse. Using the theoretical approaches of G. Tallok and V.I. Lenin, the article identifies the main types of threats to the current political regime (external invasion, a coup within the elite, economic collapse, mass protests), as well as the likelihood of their implementation under the current policies of the DPRK leadership. The authors describe several development scenarios based on an analysis of factors that can affect the situation in North Korea in the short and medium term. Maintaining the status quo stands out in the first place in terms of probability. Less likely scenarios include “sinofication” due to Beijing's growing influence on Pyongyang, military escalation leading to an armed conflict on the Korean Peninsula, political and economic crisis.

Owner-managers and firm performance during the asian and global financial crises: evidence from Korea

ABSTRACTWe examine the performance of the Korean owner-managers during the 1997−1998 Asian financial crisis and the 2008−2009 global financial crisis to establish whether they overcome the unexpected exterior shocks better than employed managers. We find that the owner-managers record a significantly greater performance during the crises, and especially during the latter period. Moreover, our results suggest that such a tendency comes from the owner-managers’ superior investment decisions. Our paper thus highlights the role of owner-managers by studying their performance during the Korean economic crisis periods. (JEL G01, G32, G34)

Domestic Governance Failure and the 2008 Korean Economic Crisis

Domestic Governance Failure and the 2008 Korean Economic Crisis

Domestic Governance Failure and the 2008 Korean Economic Crisis

Domestic Governance Failure and the 2008 Korean Economic Crisis

From the financial crisis to the next eleven: limits and contradictions in the Korean process of capital accumulation

This paper examines the South Korean economic crisis of 1997–1998 and the subsequent recovery. For this, it first analyses the specific characteristics and long-term development of the process capital accumulation there. The paper claims that, as in the rest of East Asia, capital accumulation in Korea has, since the mid-1960s, revolved around the production of specific industrial goods for world markets using the relatively cheap and disciplined local workforce for simplified labour-processes as appendage of the machine or in manual assembly operations. This modality of accumulation resulted from changes in the forms of production of relative surplus-value on a global scale through the development of computerisation and robotisation, and the concomitant transformation in the productive attributes of the collective worker of large-scale industry. The 1997–1998 financial-cum-economic crisis, as well as the foundations and characteristics of the subsequent recovery, are understood as manifestations of the contradictory dynamics of this specific form of capitalist development.

How Does Job Mobility Affect Inequality? Evidence from the South Korean Economic Crisis

Previous research suggests that increasing job mobility leads to increasing economic inequality. In this study, I argue that an increase in job mobility can be inequality reducing, depending on the macro-structural context in which job changes become more frequent. I demonstrate empirical evidence by applying a new analytical approach to data from the South Korean economic crisis of the late 1990s. I find that rates of job transitions increased significantly during and after the economic crisis, and that more frequent movements between jobs ameliorated the rising trend in inequality: in other words, inequality in occupational status after the crisis would have been even greater had it not been for changes in the pattern of transitions between jobs.

Non-Traditional Security Issues in North Korea ed. by Kyung-Ae Park

Reviewed by: Non-Traditional Security Issues in North Korea ed. by Kyung-Ae Park Jerôme de Wit Non-Traditional Security Issues in North Korea edited by Kyung-Ae Park . Honolulu : University of Hawai’i Press , 2013 . 265 pp. When the international media discusses North Korea, the most common topic that is paid attention to is its pursuit of weapons of mass destruction and its missile program. This is usually paired with reports on North Korea’s belligerent rhetoric and a reminder of its million men army that are a threat to Northeast Asian security, Seoul in particular. Scholars and policy makers with a focus on North Korea are also keen to focus almost exclusively on these topics and one can find many analytical papers on the North’s military, defense budget, fighting capability, the state of its weapons systems, military exercises, etc. These studies all focus on national security concerns and belong to the realm of traditional security. This edited volume of works by North Korea experts is an attempt to shift the focus away from these traditional concerns. The book’s argument is that the theories and notions of national security have failed to offer an adequate explanation of the national security threats posed by North Korea. The contributors believe that the North’s national security concerns are to a high degree informed by human security and non-traditional security (NTS) issues, and, once the causes of the North’s national insecurity are known, we are better able to handle the threats posed by the North to our (inter-)national security. The first chapter introduces the concept of NTS and examines in the context of North Korea how NTS and traditional security form complex and multifaceted connections. It describes how the indeterminate relationship between national and human security can be conceptualized by focusing on NTS issues. By using examples of the North’s insecurity issues in regards to food and energy security, this chapter explains how NTS issues can serve as an important variable in determining whether a state and its society can be deemed secure or unsafe. The next chapters all deal with a specific non-traditional security issue. Chapter two gives a brief history of North Korea’s energy problems and discusses the impact the lack of energy security has on the North’s economy and society. The authors of this chapter regard energy shortages as one of the reasons why North Korea uses the threat of military action to try to induce the international community to meet its demands. Addressing these concerns will in their opinion help the overall security of the Northeast Asian region and they suggest several assistance approaches. Chapter three examines the NTS issue of economic security in connection with women in North Korea. The author shows that the North Korean economic crisis has had different impacts on men and women in that it changed [End Page 147] the pattern of women’s economic participation, dragging women away from the formal labor market into the informal private economic sector. This has also forced a number of women to cross the North Korean border in their attempt to provide for both their own and their families’ livelihoods. On the one hand it seems that the new economic roles that women have assumed has given them a stronger voice in family decision-making matters and allowed them to develop, to some degree, a sense of self-consciousness and awareness of their own rights. On the other hand women’s economic insecurity has negatively affected other sectors of their NTS and human security resulting in new threats such as an increase in workloads, sex trafficking and sexual violence, and the stress of family breakdowns. Chapter four deals with political bias in labeling North Korea a criminal state. By giving an overview of how transnational crime is securitized, the author shows that issues surrounding North Korea’s criminal behavior are more fiction than fact, and that even in cases where North Korea does indulge in such activities, their scope is small in comparison to other players in this arena. Issues related to North Korea’s food insecurity are the focus of chapters five and six. The...

Changes in Economic Environment, Learning, and Dynamic Capabilities in Korean Firms

Korean firms (chaebols) faced increasing global competition as Korea became a member of the WTO and OECD, and the world economy continued to globalize. These changes in the economic environment led to a Korean economic crisis that caused Korean firms to transform. This paper investigates factors that contributed to the economic crisis and examines Korean firms' learning and innovations based on knowledge learned from the economic crisis. Some Korean firms' financial resource selection and deployment were ill-prepared for the changes in the economic environment (global competition); these firms were dissolved as the economic environment drastically changed. Other Korean firms learned the importance of multiple factors: managers' awareness and adaptabilities to changes in market conditions, corporate core competency and capability, managers' investment decisions, and principles of corporate management. Many Korean firms increased competitiveness by making changes in their competitive mindset and adopting new business practices after the economic crisis. Emphasis on competence-creation and globalization, the most prevalent changes, made Korean firms competitive.

Social inequalities in life expectancy and mortality during the transition period of economic crisis (1993–2010) in Korea

BackgroundsThis study examines social inequalities in life expectancy and mortality during the transition period of the Korean economic crisis (1993–2010) among Korean adults aged 40 and over.MethodsData from the census and the national death file from the Statistics Korea are employed to calculate life expectancy and age-specific-death-rates (ASDR) by age, gender, and educational attainment for five years: 1993, 1995, 2000, 2005, and 2010. Absolute and relative differences in life expectancy and Age-Specific Death Rates by educational attainment were utilized as proxy measures of social inequality.ResultsClear educational gradient of life expectancy was observed at age 40 by both sexes and across five time periods (1993, 1995, 2000, 2005, and 2010). The gradient became notably worse in females between 1993 and 2010 compared to the trend in males. The educational gradient was also found for ASDR in all five years, but it was more pronounced in working age groups (40s and 50s) than in elderly groups. The relative disadvantage of ASDR among working age Korean adults, both males and females, became substantially worse over time.ConclusionsSocial inequalities in life expectancy and ASDR of the working age group across socioeconomic status over time were closely related to the widening of the social difference created by the macroeconomic crisis and the expansion of neo-liberalism in Korea.

Economic crisis, women's changing economic roles, and their implications for women's status in North Korea

Although many studies have analyzed the gendered impact of economic crisis, few have examined the case of North Korea. This article will explore how North Korea's economic crisis caused changes in women's economic participation. It will also analyze the impact of these new economic roles on the lives of women, and examine the broader implications of these roles for the status of women in North Korea. The North Korean economic crisis changed the pattern of women's economic participation, pulling women out of the formal labor market and driving them into the informal private economic sector. It also forced a number of women to leave their homeland in order to provide support for their own and their families’ livelihoods. The new economic roles women have assumed in the wake of the food crisis have affected women's lives in many negative ways, resulting in an increase in their workloads, as well as an increase in the amount of sexual violence and stress of family breakdowns they experience. At the same time, however, these new roles have given women stronger voices in family decision-making matters and allowed them to develop, to some degree, a sense of self-consciousness and awareness of their own rights. Nevertheless, the fact that women have been engaged in new economic activities does not imply that they also have a high likelihood of advancing their socioeconomic status. To the contrary, women's defection from their homeland does not allow them to voice their opinions in matters related to the existing gender inequalities. Moreover, North Korean women are not considered capable of forming a critical mass, as they lack economic, social, political, and organizational resources to collectively voice their discontent. Furthermore, the neo-Confucian tradition of male superiority that is still firmly entrenched in the society is a major barrier that remains to be overcome.

Changes in Occupational Safety and Health Indices After the Korean Economic Crisis: Analysis of a National Sample, 1991–2007

We examined how the deregulation of South Korea's labor laws during the country's 1997 to 1998 economic crisis affected occupational safety and health. Although the economic index improved after the reforms, the total injury rate declined slowly and the incidence of occupational disease increased. The withdrawal of support for occupational safety and health is likely to have a sustained effect on public health.

Korean Economic Crisis and Developmental State Model

Korean Economic Crisis and Developmental State Model

To be or not to be: an economic shock, stress and suicidal ideation

The probit estimation using a large individual data set associated with the Korean economic crisis in 1997 shows that the suicidal ideation demonstrates strong response to economic crisis, depression and stress. The elasticity of income on suicide risk is greater for males than females and greater for youths and adults than olds.

The Korean economic crisis and working women

This article evaluates the impact of the 1997 Korean economic crisis on female employees. Facts on employment, labour force participation, and the changing nature of jobs (permanent/temporary) tend to support “buffer” theories of women's employment. Occupational sex segregation was reduced substantially between 1997 and 2002; nonetheless, the unexplained portion of the wage differential between men and women (a proxy for wage discrimination) increased. The crisis created setbacks for the equality of working women in Korea; however, new realities stimulated a changed strategy in the form of a union for contingent and small-firm workers among Korean women.

Political and economic processes in the privatization of the Korea telecommunications industry: A case study of Korea Telecom, 1987–2003

The Korean government completed its privatization of Korea Telecom (KT) in May 2002. Privatization was undertaken at a gradual pace at first mainly because the Korean government did not want to hand over its managerial power to the privatized telecommunications service company, although it announced its plan in 1987. However, the inauguration of the World Trade Organization (WTO) system and the Korean economic crisis of 1997 forced the government to accelerate its full privatization plan. During this process, several main players such as the Korean government, transnational corporations, international organizations, and large domestic conglomerates played important roles. The full privatization of KT is the result of the political, social, and economic demands of these players.

Impact of economic crisis on cause-specific mortality in South Korea

Economic changes can be powerful determinants of health. In the late 1990s, South Korea experienced a steep economic decline. This study examines whether the massive economic changes affected trends in all-cause and cause-specific mortality in South Korea. Mid-year population estimates of 5 year age groups (denominators) and death certificate data (numerators) from the National Statistical Office of Korea were used to compute cause-specific age-standardized mortality rates before and after the economic crisis. All-cause mortality continued to decrease in both sexes and all age groups during the crisis. Cerebrovascular accidents, stomach cancer, and liver disease contributed most to this decline. A remarkable decrease in transport accident mortality rates was also observed. The most salient increase in mortality was suicidal death. Mortality from homicide, pneumonia, and alcohol dependence increased during the economic crisis, but these accounted for a small proportion of total mortality. Short-term mortality effects of the South Korean economic crisis were relatively small. It appears that any short-term effects of the economic decline were overwhelmed by the momentum of large declines in causes of death such as stroke, stomach cancer, and liver disease, which are probably related to exposures with much longer aetiological periods. However, this study focused on rather immediate mortality effects and follow-up studies are needed to elucidate any longer-term health effects of the South Korean economic crisis.

The Korean Economic Crisis and Coping Strategies in the Health Sector: Pro-Welfarism or Neoliberalism?

In South Korea, there have been debates on the welfare policies of the Kim Dae-jung government after the economic crisis beginning in late 1997, but it is unquestionable that health and health care policies have followed the trend of neoliberal economic and social polices. Public health measures and overall performance of the public sector have weakened, and the private health sector has further strengthened its dominance. These changes have adversely affected the population's health status and access to health care. However, the anti-neoliberal coalition is preventing the government's drive from achieving a full success.

The 1997–1998 Korean crisis: Domestic or external causes?

Domestic economic inefficiencies and imported panic have been alternatively argued to have caused the 1997–1998 Korean economic crisis. The aim of this paper is to determine which of the two hypotheses is the more likely to explain the fall in output that occurred during the crisis. A dynamic model of a small open economy is built and parameterized to fit the main characteristics of the Korean economy. Then, we perform some accounting, simulating it with the actual shocks to the domestic productive efficiency and to the foreign real interest rate. Both factors appear to have played an important role in the fall of output meaning that both theories are required for the model to be able to explain the amplitude of the fall in the output during the 1997–1998 Korean crisis.

Marital Relationships Following the Korean Economic Crisis: Applying the Family Stress Model

In response to the recent economic crisis in Korea and its negative effects on families, the current study examined the interrelationships among economic pressure, emotional distress, marital conflict, and marital satisfaction for 236 Korean couples. The family stress model (Conger & Elder, 1994; Conger, Rueter, & Conger, 2000; Conger, Rueter, & Elder, 1999) was tested using structural equation modeling. The results generally supported the theoretical model, showing that economic pressure negatively affects marital satisfaction via emotional distress and marital conflict. The results also implied cultural differences in the process of family stress. Korean husbands' emotional distress did not affect marital conflict or marital satisfaction, suggesting that Korean husbands may differ from their wives in their reaction to emotional distress from economic pressure.