Financial Globalization by South Korea and Its Policy Implications
研究了韩国金融自由化进程中黑市汇率贬值对货币需求的长期影响，并分析了其政策含义，对关注新兴市场金融开放的经济学者有参考价值。
INTRODUCTION As a group, Asia's newly industrialized countries--Hong Kong, Singapore, South Korea, and Taiwan--achieved the most spectacular economic growth in the 1980s. The economic success of these Asian Pacific Rim countries has been accompanied in each instance by high rates of investment and savings, rapid technology transfer, and expanding international trade. With the gradual liberalization of financial intermediaries and capital markets, each country's financial sector has played a crucial role in that nation's and the region's economic success (Cole and Patrick 1986, Bae and Kim 1987, McKinnon 1989). Currently, the total market value of the region's common equities and bond issues accounts for approximately one-third of the world's total capital market volume (Kim and Kim 1993). In addition, the increasing number of open-and closed-end investment funds specializing in Asian equities demonstrates clearly the strategic importance of capital markets in this region for international investment decisions. Thus, the present and expected future capital inflows to and outflows from the Pacific Rim countries are and will be substantial, and each country's exchange rate policy is vital. In recent years, a number of studies have looked at the impact of foreign interest rates and expected currency depreciation on domestic demand for money in developing countries (Darrat and Arize 1990, Hassan 1992, Hassan 1993). However, the empirical evidence on this issue is inconclusive as to whether the impact of foreign interest rates and currency depreciation on domestic money demand is significant, and especially whether the results are directly attributable to the use of official exchange rates (usually pegged to major currencies) or black market exchange rates in calculating currency depreciation. The purpose of this paper is two-fold: to describe the financial liberalization and innovation processes of South Korea, where economic success has been achieved in spite of differences from other NICs in terms of economic and financial systems and endowments of natural resources; and to investigate the determinants of the demand for money in South Korea where financial liberalization programs have been introduced in the last ten years. Specifically, the paper will investigate whether depreciation of the black market exchange rate influences demand for money over the long-run and if so, over what period--before or during the on-going financial liberalization process. The study is organized as follows: the first section briefly describes the financial liberalization process in South Korea. The second section reviews the literature on the relationship between demand for money and black market exchange rates. The third section sets up the testing demand for money equations with black market exchange rate for South Korea and includes descriptions of the data used. The empirical results of the model are in section four. Finally, the conclusion and policy implications are provided in section five, including the paper's limitations and further research. LIBERALIZATION IN SOUTH KOREA In January, 1981, the Korean government announced a four-stage plan with a proposed time-table for the opening of the securities market in response to the changes in the domestic and world economy and international financial environment (Korea Stock Exchange 1992). The general thrust of the plan was to increase portfolio investment opportunities for foreign investors on a gradual basis. The major outline for internationalization of the securities markets included: Stage One (1981-1984) authorizing international investment trusts and preparing for the opening of the securities market, Stage Two (1985-1987) allowing foreigners to invest in Korean securities on a direct but limited basis, Stage Three (1988-1990) gradually lifting restrictions on foreign investment and allowing foreign offerings by domestic corporations, and Stage Four (early 1990s) allowing domestic investors to invest in foreign securities. …