Rebalancing Growth in the Republic of Korea

The current account surplus of the Republic of Korea (henceforth Korea) increased significantly in the immediate recovery period after the 1997-1998 Asian financial crisis. Since then the surplus has gradually diminished, and from 2006 to 2008, the current account was close to being balanced. Econometric analysis reveals that the effect of exchange rate changes on Korea's trade is not robust during non-crisis periods. Exchange rates only significantly affect trade when observations during crisis periods are included. This suggests that exchange rate adjustments alone will not solve the imbalance issue. Korea's external imbalances are not only caused by external factors; they also reflect internal and policy factors such as: (i) saving-investment imbalances; (ii) export-oriented policies; and (iii) the unbalanced structure of manufacturing and services. These internal imbalances result from domestic distortions and structural imbalances arising from market inefficiencies and public policies. These must be addressed to ensure balanced and sustained economic growth.korea economic growth; korea external imbalances; korea trade

An Inquiry into the Competitiveness of Emerging Philippine Cities

This paper attempts to approximate the competitiveness of the country’s ten leading emerging urban centers: Angeles, Baguio, Cagayan de Oro, Davao City, General Santos, Iligan, Iloilo, San Fernando La Union, Tacloban and Zamboanga. The study uses both ranking and scoring methods to rate the cities in eight major drivers: cost competitiveness, human resources endowment, infrastructure, linkages with major urban centers and growth areas, quality of life, responsive of local government units and dynamism of local economy. It best serves as a policy and urban management tool for concerned local officials and leaders of various private sector groups in identifying the cities’ strength and areas of improvement. Insights on overall scores and rankings point to the importance of local leadership, emphasis on improving quality of lives in urban centers and the role of surrounding local and/or international growth formations in enhancing urban competitiveness. Any combination of these factors actually explains the high rankings garnered by General Santos City, Angeles City and Baguio.urban management, urbanization, competitiveness, urban development

Global and regional financial safety nets: lessons from Europe and Asia. Bruegel Working Paper 2013/06 [07?], November 2013

The Asian financial crisis (1997) and the European crisis (2009) have both contributed to the development and deepening of regional safety net arrangements. This paper analyses the relationships between global and regional financial safety nets, and uncovers the potential tensions and operational challenges associated with the involvement of several institutional players with potentially different interests, analytical biases and governance. The G20 has acknowledged the importance of these new players for the international monetary system, but the principles for cooperation between the IMF and regional financing arrangements are far too broad and ad hoc to contribute to a coherent and effective architecture. This paper tries to establish some lessons learned from the Asian financial crisis in 1997 and the current European crisis in order to enhance the effectiveness, efficiency, equity and governance of these arrangements. In particular, it proposes changes to the IMF articles of agreement to allow for lending or guarantees to regional arrangements directly and it establishes some key desirable features and practices of regional mechanisms that should be adopted everywhere to ensure some global consistency, particularly in the field of macroeconomic surveillance, programme design and conditionality

Rebalancing Growth in the Republic of Korea

The current account surplus of the Republic of Korea (henceforth Korea) increased significantly in the immediate recovery period after the 1997–1998 Asian financial crisis. Since then the surplus has gradually diminished, and from 2006 to 2008, the current account was close to being balanced. Econometric analysis reveals that the effect of exchange rate changes on Korea's trade is not robust during non-crisis periods. Exchange rates only significantly affect trade when observations during crisis periods are included. This suggests that exchange rate adjustments alone will not solve the imbalance issue. Korea's external imbalances are not only caused by external factors; they also reflect internal and policy factors such as: (i) saving-investment imbalances; (ii) export-oriented policies; and (iii) the unbalanced structure of manufacturing and services. These internal imbalances result from domestic distortions and structural imbalances arising from market inefficiencies and public policies. These must be addressed to ensure balanced and sustained economic growth.current account surplus, Asian financial crisis, Korea, saving-investment imbalances, export-oriented policies

Rebalancing Growth in the Republic of Korea

The current account surplus of the Republic of Korea (henceforth Korea) increased significantly in the immediate recovery period after the 1997–1998 Asian financial crisis. Since then the surplus has gradually diminished, and from 2006 to 2008, the current account was close to being balanced. Econometric analysis reveals that the effect of exchange rate changes on Korea's trade is not robust during non-crisis periods. Exchange rates only significantly affect trade when observations during crisis periods are included. This suggests that exchange rate adjustments alone will not solve the imbalance issue. Korea's external imbalances are not only caused by external factors; they also reflect internal and policy factors such as: (i) saving-investment imbalances; (ii) export-oriented policies; and (iii) the unbalanced structure of manufacturing and services. These internal imbalances result from domestic distortions and structural imbalances arising from market inefficiencies and public policies. These must be addressed to ensure balanced and sustained economic growth. [ADBI Working Paper 224]Republic of Korea, Asian, policy, domestic, economic