AP Econ-Lee-04

https://www.google.com/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_mktp_cd&scale_y=lin&ind_y=false&rdim=region&idim=country:KOR&ifdim=region&hl=en&dl=en&ind=false&q=korea+gdp
GDP in current U.S. dollar


As shown above, South Korea has met two significant economic depressions since its independence in 1945: one in 1998 and the other in 2009. GDP started from almost zero and achieved impressive growth for past 50 years. In addition, GDP per capita shows similar trend. In 1998, however, South Korea met currency crisis due to change in policy and sudden collapse of market confidence. Since 1980, Korean Government let the capital flow freely and opened the market. Suddenly large enterprises collapsed and increased the risk of investment. Thus, foreign investors  prefered U.S. dollar, and Won (the korean currency) lost its value. Other Asian nations also had similar indications of currency crisis. Korean Government asked help from International Monetary Fund and other international banks to overcome this crisis. Also Korean citizens had Gold campaign to repay their debts. As a result, South Korea repaid all 19.5 billion dollar within 3 years and 8 month.

2008 financial crisis was global crisis. Korea is dependent on exports which means that U.S. crisis equals Korean crisis. Also, increasing oil price and interest rate influenced the crisis. Main cause of U.S. crisis is subprime mortgage, lending money to low income laborers with high interest. Several banks collapsed, and economy collapsed.

Main industries of South Korea are electronics, telecommunications, automobiles, chemicals, shipbuilding and steel production, (basically IT industry). Main export goods are semiconductors, wireless telecommunications equipment, moter vehicles, computers, steel, ships, and petrochemicals. Main import goods are machinery, electronics, oil, steel, transport equipment, organic chemicals and plastics. Major trade partners are U.S., China, Japan and Saudi Arabia. Furthermore, South Korea is 6th exporting nation and 8th importing nation.