The Korean Economic Crisis

Paper Summary:

In this paper the author looks at how the currency of South Korea, the won, de-valuated greatly against the American dollar. The author looks at how this devaluation affected South Korea's economy in that several of its businesses are on the verge of bankruptcy, unable to repay their massive foreign and domestic debts. The author looks at the request by South Korea for help from the International Monetary Fund (IMF) and the proposed plan by the IMF. In conclusion, the author states that there are clearly two parties of thought, some who believe the IMF plan will work and South Korea's economy will blossom and others who believe it will continue to deteriorate.

Table of Contents
Introduction
U.S. Involvement in South Korea's Economic Development
South Korea's Basic Economic Structure
The Fall of South Korea's Economy
The International Monetary Fund
Prognosis

From the Paper:

"The economic strategy emphasizing exports had produced a shortage of domestic consumer goods that was exacerbated by the increasing demands brought about by rising wages and the advance in living standards. Price controls imposed on producers of consumer goods discouraged the manufacture of these goods, and the rapid inflow of dollars expanded the money supply and inflation became a serious problem.
President Park addressed these problems by replacing the economic team in December 1978 and adopting stabilization measures. However, these methods caused a recession, produced a series of bankruptcies among small and medium loan-dependent enterprises, and increased unemployment. This situation was similar to Korea's current economic problems. However, foreign aid continued to flow into the country and the government and large companies were able to continue servicing their debts."

More papers on The Korean Economic Crisis:

• Analytical Essay # 103228 : "Globalization and the South Korea Crisis, 1997-1998"
• Research Paper # 12323 : "The Changing Economic Models of Chaebol Capitalism"
• Comparison Essay # 102383 : "The Asian Financial Crisis"

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