TY  - JOUR
AU  - Cho, Dongchul
AU  - Koh, Youngsun
TI  - Liberalization of Capital Flows in Korea: Big-Bang or Gradualism?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5824
PY  - 1996
Y2  - November 1996
DO  - 10.3386/w5824
UR  - http://www.nber.org/papers/w5824
L1  - http://www.nber.org/papers/w5824.pdf
N1  - Author contact info:
Dongchul Cho
Bank of Korea
E-Mail: dccho@kdischool.ac.kr

Youngsun Koh
Korea Development Institute
E-Mail: yskoh@kdi.re.kr
M1  - published as Dongchul Cho, Youngsun Koh. "Liberalization of Capital Flows in Korea: Big Bang or Gradualism?," in Takatoshi Ito and Anne O. Krueger, editors, "Changes in Exchange Rates in Rapidly Developing Countries: Theory, Practice, and Policy Issues" University of Chicago Press (1999)

AB  - Capital market liberalization has become an irreversible trend in Korea since 1992.  With the current level of high interest rate in Korea, however, drastic full-scale liberalization would certainly attract a large amount of capital inflows and appreciate the Korean won.  This would affect the price competitiveness of Korean products in international markets, which could bring about significant macro-instability in an economy like Korea which relies heavily upon external transactions.  Through simulations using a macro-model based on the neoclassical long-run convergence and the Keynesian short-run dynamics, this paper attempts to provide some quantitative assessments of several alternative policy choices including the speed of liberalization.
ER  -