Capital controls: Gates versus walls
Michael W Klein 17 January 2013
Capital controls are back in vogue. This column argues that we should distinguish between episodic controls (gates) and long-standing controls (walls). Research shows that the apparent success of 'walls' in China and India tells us little about the consequences of capital controls imposed or removed in countries like Brazil and South Korea, as circumstances change. Walls and gates are fundamentally distinct, and policy debate needs to take into account these differences.
Capital controls are no longer considered rogue policies.
China, South Korea, capital controls, Brazil
Financial crises in emerging markets: The impact of private sector risk
Betty C. Daniel 01 July 2012
What causes financial crises in emerging markets? This column looks at the effect of risky investments in South Korea on the Asian financial crisis of the late 1990s.
What causes financial crises? The causes of the global crisis of 2008-2009 have been widely analysed (see for example Eichengreen 2008), just as the Asian crisis was in the 1990s. As economists, we want to attribute crises to something like fraud, greed, cronyism, or misbehaviour of some kind. We want to think that if we can control misbehaviour, we can eliminate crises.
Development Financial markets Global crisis
emerging markets, South Korea, private sector, Asian crisis
A region-wide free trade agreement in Asia
Pradumna B. Rana 25 June 2012
China, Japan, and South Korea are currently negotiating a free trade agreement (FTA) lending support to the possibility of an agreement for the South-East Asian region as a whole. This column calls for more of the same – and quickly.
The Trilateral Summit last month announced that negotiations would begin later this year on a China/Japan/South Korea FTA or the C/J/K FTA (Joint Declaration 2012). This suggests that two pathways to a region-wide FTA are starting to evolve in Asia. One is the ASEAN-led East Asian FTA and the Comprehensive Economic Partnership for East Asia (CEPEA) comprising the ASEAN+6 including India. The alternative pathway is the US-led Trans-Pacific Partnership, which is already under negotiation.
China, Japan, free trade agreement, ASEAN, South Korea
South Korea’s temporary trade barriers before and during the crisis
Moonsung Kang, Soonchan Park 04 September 2011
How have South Korean trade flows responded to the financial crisis of 2008-09? This column, part of a collection of four columns on trade responses to the crisis, finds that although relatively few antidumping duties were initiated, the Korea Trade Commission was more active in imposing these duties.
During the global crisis there was a severe decline in trade known as the Great Trade Collapse (Baldwin 2009). As described by the OECD (2010) and WTO (2010), in 2009 world merchandise exports fell by 12% while world GDP fell by 2.5%. South Korea (hereafter, Korea) was no exception. In 2009, its exports fell by 13.9% while imports dropped by 25.8%.
global crisis, South Korea, murky protectionism, great trade collapse, temporary trade barriers, antidumping duties
Emerging partners create policy space for Africa
Helmut Reisen, Jean-Philippe Stijns 12 July 2011
Many discussions of official development assistance express concerns about China's growing investment and involvement in Africa economies. This column, summarizing the 2011 African Economic Outlook report, emphasizes the benefits of emerging economies' increasing presence in Africa, including the opening of African policy space due to Western donors' decline in relative influence.
Western politicians have watched the increased presence of emerging countries in Africa with much suspicion. Insinuations run from emerging countries – above all China – bringing down governance standards in Africa to them re-indebting, de-industrialising, and cornering African countries into the production of commodities while only enriching the elites. On a recent Africa tour, US Secretary of State Hillary Clinton warned Africa to beware of “new colonialism” as China expands ties there and focus instead on partners able to help build productive capacity on the continent.
Development International trade
China, Africa, India, emerging markets, South Korea, Brazil, Turkey
Emerging markets consider capital controls to regulate speculative capital flows
Kavaljit Singh 05 July 2010
Despite recovering faster than developed countries, many emerging markets are struggling to cope with large capital inflows. This column discusses the recent capital controls imposed by Indonesia and South Korea. It argues that while the international community is warming to these policies, it would be wrong to view capital controls as a panacea.
Just days before the G20 summit in Toronto, South Korea and Indonesia announced several policy measures to regulate potentially destabilising capital flows which could pose a threat to their economies and financial systems.
The policy measures announced by South Korea and Indonesia assume greater significance because both countries are members of the G20 and because South Korea chairs the G20 in 2010.
capital flows, Indonesia, G20, South Korea
Venturing abroad at the cost of domestic employment?
Peter Debaere, Joon H. Lee , Hongshik Lee 24 December 2008
Do firms reduce their domestic employment when they establish operations abroad? Evidence from South Korean firms suggests that the impact varies by destination and operation. This column shows that concerns about investment in developing countries slowing employment growth at home may have empirical support.
The recent wave of globalisation is characterised by a worldwide increase in exports and foreign direct investment (FDI). Multinationals play an important role in both. The public in many instances views these multinational activities with some scepticism, concerned that offshoring activities will reduce domestic employment in the firms that venture abroad. Such concerns are heard not only in the US and Europe, but also especially in Asia which is perhaps most directly affected by China’s economic performance.
employment, FDI, South Korea