Korean Economic

5 Pages 1251 Words

Economic Miracle and Crisis

Korea, 'The Land of Morning Calm', which is located between two major Asian countries, Japan and China, has founded its basic economic system by producing food such as rice and trading them since B.C. 3000. Korea also has been known as one of the Four Dragon in Asia along with China, Japan, and Taiwan, which held Seoul Olympics in 1988.
The main purpose of this paper is to inform the historical economic changes and the current macro economic system of Korea related to the political and economical events.

First of all, to understand Korean economic, we need to acquire some historical information about what Korea has undergone and overcome.
During World War II, Japan ruled Korea for 48 years, and when Japanese colonial rule ended in 1945, which implied separation from imperial system of division of labor, Japanese entrepreneurs and skilled workers returned to Japan, forcing a number of firms and plants to stop operating. After the independence from Japan, rapid contraction between foreign countries, such as United States and Russia has been concluded confidentially. Korea, eventually, had to be divided by two parts, South and North. North Korea has become to follow socialism affected by Russia, and South Korea has become to pursue capitalism affected by United States. The worst thing that ever happened to Korea was the war between those two parts. The consequences were miserable. All the buildings and facilities are destroyed and the productive inputs were destructed. However, South Korea has accomplished remarkable growth since then. Due to the fact that Korea has been divided by two parts, from now on, I will only focus on the economy of South Korea.
After the war, Korean (South) per capital GDP grew by 7.3% per each year from 1962 to 1991. This was remarkable growth compared to other countries. In the early 1960s, Korea started out with import substitution industrialization policy (ISI)...