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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 24, No. 4, pp.495-524
ISSN: 1225-0279 (Print)
Print publication date 30 Nov 2011
Received 27 Sep 2010 Revised 10 Nov 2010 Accepted 11 Nov 2010

Monetary Policy of the Bank of Korea during the First 60 Years

Kyungsoo Kim ; Jaewoo Lee
Professor, Department of Economics, Sungkyunkwan University, 53 Myeongnyun-dong 3-ga, Jongno-gu, Seoul 110-745, Korea, Tel: +82-2-760-0431, Fax: +82-2-760-0946 kimks@skku.edu
Corresponding Author, Deputy Division Chief of the Open Macroeconomics Division, the IMF Research Department, 700 19th St N.W., Washington DC 20431, USA, Tel: +1-202-623-7331, Fax: +1-202-589-7331 jaewoo.lee@alum.mit.edu

JEL Classification: E4, E5, F4

Abstract

The current paper provides an analytic overview of the history of monetary policy in Korea, since the founding of the Bank of Korea in June 1950 through the spring of 2010. In light of the dramatic socioeconomic transformation over this period, the 60 years are divided into four phases, which provided a different environment for the conduct of monetary policy. An organizing analytical framework is proposed for each phase, with the hope of facilitating further research.

Keywords:

Inflation, Liberalization, Small open economy

Acknowledgments

We appreciate the comments by participants in the Bank of Korea 2010 Conference, the seminar in the Korea University, and the 18th Seoul Journal of Economics International Symposium in Seoul National University, and in particular, by Andrew Filardo, Stan Fischer, Dongsoo Kang, Jun Il Kim, Soyoung Kim, Kwanho Shin, and Woon Shin. This paper is based on personal views of both authors as macroeconomists, and does not necessarily reflect the views or policies of the Bank of Korea or the IMF. The views expressed herein should not be attributed to the IMF, its Executive Board, or its management.

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