Finance and Growth of the Korean Economy from 1960 to 2004

Shin-Haing Kim

Professor, School of Economics, Seoul National University, Seoul 151-746, Korea, Fax: +82-2-886-4231 shk@plaza.snu.ac.kr

JEL Classification: F4, O5

Abstract

In this paper I overview the relation between finance and growth of the Korean economy from the year of 1960 to that of 2004 through the literature survey. Financial regimes of liberalization and those of repressions alternated each other during this period. However, economic growth continued independently of the various financial regimes. Financial deepening, as well as an increase in the variety of financial instruments, accompanied an increase in per capita income. In particular, it is observed that a peak growth rate of the trade balance lagged behind eight to ten years that of investments. In the interval of these two peaks occurred the financial distresses. Possible scenarios for investment financing role of exports are suggested.

Keywords:

Finance, Growth, Korean economy

Acknowledgments

The comments of the unknown referees improved the exposition of this paper for which I appreciate.

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