ABSTRACT
During the past year myriad new reports appeared with accounts o f the crash o f the Asian economies. What began with the panic triggered by the failure o f the Thai financial system led to the rapid economic downturn o f some o f the globe’s most dynamic economies in 1997 and 1998. Especially for South Korea1 the consequences o f financial and economic crisis and the intervention o f the IMF in overcoming the related problems were extremely painful, which include, for example,
• a large number o f bankruptcies o f industrial firms and private banks, • the increasing pressure on industrial firms to carry out rapid structural change
and specialization on a limited number of competitive areas including the socalled ‘big deal’ o f exchanging business activities among large conglomerates,
• the massive dismissal o f workers and the subsequent social and inner-firm unrest,
• the increase o f production costs caused by the won devaluation and the change o f relative prices o f import goods such as semiconductors and natural resources like petroleum,
• the drastic decrease in domestic households’ demand and firms’ investment spending caused by income reduction and high interest rates, etc.2
