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Decrease in the Growth of Domestic Demand in Korea

Author

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  • Moon, Seongman

    (Chonbuk National University)

Abstract

This paper investigates a link between the significant decline in the growth of domestic demand and the dampened ripple effects from the export sector in Korea since the East Asian financial crisis. The dampened ripple effects are closely linked to the changed investment behaviors of the Korean large-sized exporting firms since the crisis: they do not invest in their export earnings any more to create new industries; they tend to use more foreign value added contents for their exports and to increase outward direct investment by actively participating in global value chains. The paper also examines a link between the growth of domestic demand and the growth of household disposable income and presents reasons for the decline in the growth of household disposable income since the East Asian financial crisis.

Suggested Citation

  • Moon, Seongman, 2015. "Decrease in the Growth of Domestic Demand in Korea," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 19(4), pages 381-408, December.
    • Handle: RePEc:ris:eaerev:0021
    DOI: 10.11644/KIEP.JEAI.2015.19.4.302
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    More about this item

    Keywords

    Domestic Demand; Dampened Ripple Effects; Household Income; Structural Problems; East Asian Financial Crisis;
    All these keywords.

    JEL classification:

    • E01 - Macroeconomics and Monetary Economics - - General - - - Measurement and Data on National Income and Product Accounts and Wealth; Environmental Accounts
    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

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