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Sustainability of the US Current Account Deficit and its Effects on the Korean Economy
The U.S. current account deficit has been increasing at an incredibly fast pace in recent years, reaching $393 billion in 2001, the equivalent of 3.9 percent of the GDP. The sharp growth of the current account deficit highlights t..
Moonsung Kang et al. Date 2002.12.30
Economic outlookDownloadContentSummaryThe U.S. current account deficit has been increasing at an incredibly fast pace in recent years, reaching $393 billion in 2001, the equivalent of 3.9 percent of the GDP. The sharp growth of the current account deficit highlights the dependence of domestic demand on borrowing from abroad. It implies that the external imbalance is related to the domestic imbalance between savings and investments, even though other factors such as productivity growth and investment booms in the New Economy also contributed to the current trend of the U.S. current account deficit. (The rest is omitted.) -
Exchange Rate Pass-Through in East Asia
Recently, in the new stream of open economy macroeconomics, a lot of attention has been focused on the analysis of pricing-to-market behavior, or local price setting behavior, to find if changes in the exchange rate have any effec..
Sammo Kang et al. Date 2002.12.30
Exchange rateDownloadContentSummaryRecently, in the new stream of open economy macroeconomics, a lot of attention has been focused on the analysis of pricing-to-market behavior, or local price setting behavior, to find if changes in the exchange rate have any effect on the behavior of final purchasers of goods. If nominal exchange rate changes are not fully passed through to goods prices, countries adopting a free floating exchange rate regime would not have to worry too much about a high level of exchange rate volatility. (The rest is omitted.) -
Measuring Tariff Equivalents in Cross-Border Trade in Services
Trade barriers in services do not take the form of import tariffs, but rather of a complex variety of quantitative restrictions, prohibitions and regulations. This paper attempts to measure tariff equivalents in 7 traded services ..
Soon-Chan Park Date 2002.12.30
Trade disputeDownloadContentSummaryTrade barriers in services do not take the form of import tariffs, but rather of a complex variety of quantitative restrictions, prohibitions and regulations. This paper attempts to measure tariff equivalents in 7 traded services for 51 countries by using a gravity model. It is shown that the gravity equation has great explanatory power not only in illustrating trade patterns in merchandise but also in services. Unlike previous studies, this paper shows that estimates of tariff equivalents are not systematically associated with a country's level of development. The EU countries have more open regimes relative to other industrialized countries. -
Korea's FDI into China: Determinants of the Provincial Distribution
This paper seeks to identify the major factors determining the location of Korea's FDI across 25 Chinese provinces, comparing the results with those of world FDI as a whole, and to understand why those factors are important. (The ..
Chang-Soo Lee et al. Date 2002.12.30
Overseas direct investmentDownloadContentSummaryThis paper seeks to identify the major factors determining the location of Korea's FDI across 25 Chinese provinces, comparing the results with those of world FDI as a whole, and to understand why those factors are important. (The rest is omitted.) -
An Examination of the Formation of Natural Trading Blocs in East Asia
This paper seeks to identify the appropriate form of a regional trading agreement in East Asia by examining empirically the intra-regional trade bias of various informal regional groups. The findings are as follows. First, it is d..
Chang-Soo Lee et al. Date 2002.12.30
Financial integrationDownloadContentSummaryThis paper seeks to identify the appropriate form of a regional trading agreement in East Asia by examining empirically the intra-regional trade bias of various informal regional groups. The findings are as follows. First, it is difficult to verify empirically that the three Northeast Asian countries, China, Japan and Korea, are forming a regional trading bloc. Second China and ASEAN have no special relation in trade. Third, ASEAN+3 is emerging as a strong candidate for a natural trading bloc in East Asia. Fourth, there is little evidence that ASEAN+3 is centred around Japan, while the influence of the U.S. on the intra-regional trade in ASEAN+3 is positive and strong. Fifth, ASEAN+3 is characterized by openness to trade with the rest of the world. Finally, these results strongly suggest that ASEAN+3 would be the natural policy choice for the formation of regional trading agreements in East Asia. At the same time, ASEAN+3 will not diverge from the principles of open regionalism and multilateralism, when we consider its inherently open character and the positive influence of the U.S. -
How Far Has Regional Integration Deepened?
Deep regional integration is accompanied by harmonization and coordination of regulatory regimes and policies. Such developments may result in the promotion and facilitation of trade in services, since liberalization of trade in s..
Soon-Chan Park Date 2002.12.30
Economic integrationDownloadContentExecutive Summary
I. Introduction
II. Services Liberalization in RIAs
1. EU
2. NAFTA
3. ASEAN
4. MERCOSUR
5. ANDEAN
III. Empirical Analysis
IV. Results
V. Concluding Remarks
ReferencesSummaryDeep regional integration is accompanied by harmonization and coordination of regulatory regimes and policies. Such developments may result in the promotion and facilitation of trade in services, since liberalization of trade in services requires regulatory reforms to reduce the market segmenting effect of domestic policies. To provide a clue to the question of how far regional integration agreements have advanced, this paper estimates the effects of regional integration on trade in nine services by using a gravity model. The results show that the existing regional blocs are at different stages. We identify that the efforts of the EU towards deep integration have had a significant impact on trade in services between members, while NAFTA, Mercosur and Andean trade less with their own members than their potential as suggested by income and geography. -
The Importance of the Recent Resilience of the New Zealand Economy and Its Implications
The Importance of the Recent Resilience of the New Zealand Economy and Its ImplicationsThe New Zealand economy has been remarkably resilient over the past few years. Although, the country did record minus growth once in 1998 due ..
Kyoung-Doug Kwon Date 2002.12.20
Economic developmentDownloadContentSummaryThe Importance of the Recent Resilience of the New Zealand Economy and Its Implications
The New Zealand economy has been remarkably resilient over the past few years. Although, the country did record minus growth once in 1998 due to the 1997 East Asian crisis, it immediately recovered in 1999 and achieved a high growth rate in 2000. Considering its economic performance over the past five years, it seems safe to conclude that New Zealand will be able to achieve sustainable long-term economic growth. (The rest is omitted.) -
Understanding the Determinants of Capital Flows in Korea: An Empirical Investigation
Over the past few decades, we have witnessed a surge in the volume of international capital flows, in particular into developing countries. Capital flows have both positive and negative effects on the economy. In order to maximize..
Sammo Kang et al. Date 2002.12.20
Monetary policyDownloadContentSummaryOver the past few decades, we have witnessed a surge in the volume of international capital flows, in particular into developing countries. Capital flows have both positive and negative effects on the economy. In order to maximize the benefits of capital flows and at the same time minimize the costs of capital flows, we first need to understand which factors affect capital flows for certain countries. (The rest is omitted.) -
Exchange Rate Regimes and Monetary Independence in East Asia
This paper examines whether changes in exchange rate arrangements have affected monetary independence in East Asian countries after the 1997 Asian crisis. We find that the sensitivity of local to U.S. interest rates has declined f..
Chang-Jin Kim et al. Date 2002.12.05
Monetary policy, Exchange rateDownloadContentSummaryThis paper examines whether changes in exchange rate arrangements have affected monetary independence in East Asian countries after the 1997 Asian crisis. We find that the sensitivity of local to U.S. interest rates has declined for many Asian countries since they adopted floating exchange rate regimes after the crisis. This empirical finding suggests that the choice of exchange rate regime is an important factor for the independence of monetary policy. Floating regimes appear to offer East Asian countries at least some degree of monetary independence after the East Asian crisis. -
Liberalization Measures in the Process of Korea's Corporate Restructuring: Trade, Investment and Capital Account Market Openings
This paper reviews the liberalization measures that have been implemented in Korea since the financial crisis in 1997, and analyzes how well and in what ways they have contributed to corporate restructuring, and ultimately, to eco..
Chan-Hyun Sohn et al. Date 2002.11.30
Economic openingDownloadContentSummaryThis paper reviews the liberalization measures that have been implemented in Korea since the financial crisis in 1997, and analyzes how well and in what ways they have contributed to corporate restructuring, and ultimately, to economic rehabilitation. (The rest is omitted.)