Korean Economic Crisis

Korea's economic crisis format problem Korean economy has played an important role in remarkable economic growth This is the so-called "East Asia miracle". However, at the end of 1997, the Korean economy faced a default crisis and eventually received relief assistance from the International Monetary Fund. Since then, while improving the productivity of Korean industries while promoting substantial reform of the economic structure, Korea has been working hard on reforming its currency system.

The Asian economic crisis in 1997 was caused by the depreciation of the yen, fierce competition with China, excessive electronic markets, and large borrowings by Korean banks. Therefore, the crisis is not only influenced by external economic change, but also Korea has its responsibility. The International Monetary Fund made a $ 57 billion loan to the country under certain conditions. According to extreme liberalism, the behavior of the International Monetary Fund causes moral hazards and the embedded liberal view shows that the intervention of the International Monetary Fund is necessary to control the situation. It is Korea. A structural view is that the economic situation of the IMF is to bring benefits to G5 countries. According to Feldstein, structural reform of Korea's policy is unnecessary. Sachs criticized the bank for that purpose in a better way than the International Monetary Fund. As a result, South Korea will grow rapidly, Korean companies such as LG will expand.

Prior to the 1997 crisis, foreign direct investment in the Korean economy was relatively small, weaker than the domestic economy in Korea. (Turner and Kim, 2004) The turning point of the financial crisis in 1997 brought about a fundamental change. Prior to the crisis, temporary and unbalanced economic growth could not overcome the crisis, as the government pursued the interests of large companies like Chaebol. At the same time, previous export-oriented foreign direct investment policy has been questioned by the government. (Kim, 2003)