Econ10.25.10 - Assignment 8 Taiwan Assignment 8 Henry Wan...

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Assignment 8 Taiwan Assignment 8 Henry Wan reading Ch. 7 Korea, p. 218, Question 5 Ch. 8 Taiwan, p. 248, Questions 1, 3, 4 Assignment 8 Korea Question 5 A. No impact on productive capacity or long-term growth, made financial structure stronger, made the economy more integrated with the world economy Real GDP growth rate assumed pre-crisis rates supports this point Debt/total ratio 400% to 135%, financial structure stronger More foreign investment means more integrated with world economy, however government loses some control B.Incurred serious real cost to Korea Future impact Public debt increased 85 won->60->70 pressure to export less (imports get cheaper, exports get more expensive) hard to place in B or A Government bailout 22% of GDP: someone has to pay for bailout costs: taxes maybe? However, more investment from foreigners means profits go abroad Medical insurance problem: negative future impact (neither a or b or both a and b) Taiwan Question 1 Not an IMF member, not world bank member, not autonomous country. So Taiwan accepts equity financing rather than debt financing. Has to avoid debt crisis. Accumulate foreign exchange reserves. Taiwan needs FDI and needs to export. Taiwan Question 3 Some consistency: stability and economy growth: income inequality Maybe combination leads to good outcomes. Pursuing growth need to liberalize, need to rely on markets Consistent development path. Cannot prove this though…define it, try to find counterexamples, etc. Taiwan Question 5
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This note was uploaded on 04/06/2011 for the course ECON 343 taught by Professor Miyao during the Fall '08 term at USC.

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Econ10.25.10 - Assignment 8 Taiwan Assignment 8 Henry Wan...

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