Abstract

It was hardly expected that the initial impact of the Asian financial crisis on the Korean economy would be so severe as to throw the booming economy into a tailspin in such a short period of time. Korea’s GDP growth plummeted from the pre-crisis average level of 7 percent in the last twenty years to a negative 6.7 percent in 1998. The recovery process has been no less drastic than the initial free-fall: GDP growth in 1999 and 2000 reached remarkable levels of 10.7 and 8 percent, respectively.