SK GDP almost 10%

Rakesh Bhandari bhandari at phoenix.Princeton.EDU
Fri Aug 20 08:55:19 PDT 1999

Doug noted

>[Folks who want something to worry about should probably look at
>Latin America.]

why? as the south korean economy is export dependent, why should the stimulus from consumption on the basis of a wealth effect ("lower interest rates... boosted the stock market and made people feel wealthier") augur stable growth in the long run? Plus, like deficit spending in Japan, this may be a one-shot simulus, and the economy won't be rebounding off a low base again. Some cyclical upturn had to be expected due to the depth of the downturn in both Japan and South Korea--the question is durability and depth of these upturns. And that seems to me to be a very open question. I see little reason for optimism, especially in the case of South Korea if China devalues.

yours, rakesh

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