Fiscal Policy Issues in Korea after the Current Crisis

Published By: ADBI on eSS | Published Date: July, 07 , 2010

This paper examines fiscal policy issues in the Republic of Korea (hereafter Korea) after the 2009 global financial crisis, including the timing of fiscal policy responses, the effectiveness of expansionary measures, and the long-term implications for government debt. In order to evaluate more accurately Korea’s fiscal response since late 2008, this paper conducts an empirical analysis using historical data from Korea and other countries and derives stylized patterns on counter-cyclicality of fiscal policy and its role in the recovery process. The analysis suggests that Korea’s fiscal stimulus in 2009, while having contributed greatly to the economy’s fast recovery, was unusually large compared with typical fiscal responses during economic downturns. This paper also investigates whether the rapid increase in Korea’s fiscal debt burden is admissible in terms of long-term sustainability. [ADBI Working Paper 225]

Author(s): Kiseok Hong | Posted on: Oct 07, 2010 | Views(679) | Download (745)


Member comments

Submit

No Comments yet! Be first one to initiate it!

For permission to reproduce this paper in any way, please contact the parent institution.
Creative Commons License