South Korea: The Private Debt Story
The economic and financial developments of Japan in the 1980s, and the rise of the telecommunications and electronics industries, were critically linked to the performance and competitiveness of the East Asian economies. The large volumes of cross-border trade and investment inflows shaped a high financial multiplier for the entire East Asia region. However, as the Japanese Yen appreciated in the 1980s, non-Japanese East Asian goods became even more competitive in international markets (see the continuous appreciation of the Yen for the entire 1982–1988 period, Figure 8.1). The loss of competitiveness of Japanese firms induced many of them to move out of Japan, searching for lower costs and higher profit opportunities. This resulted in technological spillovers, which further contributed to the rise of East Asian productivity. East Asian firms were thus building up their export capacity, among other means, through Japanese and US FDI and its consequent technology transfers.1
KeywordsForeign Exchange Public Debt Industrial Policy External Debt Current Account Deficit
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