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Seoul Journal of Economics
[ Article ]
Seoul Journal of Economics - Vol. 22, No. 2, pp.181-215
ISSN: 1225-0279 (Print)
Print publication date 31 May 2009
Received 09 Apr 2009 Revised 04 Jun 2009

Notable Features of 2008 Financial Crisis and Directions of Adjustment by the Korean Economy

Chon Pyo Lee
Professor, Department of Economics, Seoul National University, Seoul 151-746, Korea, Tel: +82-2-880-6391, Fax: +82-2-886-4231 chonpyo@plaza.snu.ac.kr

JEL Classification: F3, G1

Abstract

Some notable features of 2008 financial crisis have been observed alongside with the comparison of what have been done in response to it with those of 1998 Asian financial crisis. Asymmetries between U.S. as a debtor with key currency privilege and other debtors without the original fortune were observed. It is further noticed that the asymmetries would be altered with the 2008 financial crisis as U.S. became even bigger debtor with the crisis not only to others but to herself. A few measures have been proposed to reduce the asymmetries. It was thought what were required to Asian debtors of 1998 had to be applied similarly to the debtor U.S. Massive inflation from many stimulus packages of nations was expected. It would surely lead to dollar depreciation, and it is speculated that the depreciation would resolve quite much of current global imbalance via de facto hard landing.

Keywords:

Financial crisis, Global imbalance, Key currency, Depreciation

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