The Effects Of Current Financial Crises On Trade Balances

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Executive Summary

Global financial crisis made a huge effect on Korea's trade balance. First, global financial crisis caused the recession of object economy and this recession caused decreasing of Korea's exports. Second, high exchange rate had a positive effect on Korea's exports and negative one on imports. So, in spite of the recession of world economy, Korea's trade balance turned to surplus. Third, resource price like oil, iron, and copper dropped during the crisis. This led Korea's imports price down and made Korea's trade balance positive.

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