This is a reminder of tomorrow's webinar. Please join us!
Monday 21 May, 5pm (HKST) / 6pm (KST and JST)
Pauline Debanes (PhD Candidate, Ecole des Hautes Etudes en Sciences Sociale)
The Financialization of the Accumulation Regime in South Korea since 1997. A Post-Keynesian Perspective
Once praised for its rapid industrialization, strong sciences and technology development and egalitarian growth, the Korean macroeconomy has been plagued since the turn of the century by a relatively low economic growth, a drop of investment and a sharp increase of inequalities. Indeed, the Asian crisis of 1997 propelled profound changes in institutional setting and previous capital-labor compromises from the industrialization period seem to have collapsed. While political economists have mainly been debating the continuity of the developmental state in the current period, some scholars point towards the emergence of new socio-political compromises as well as new drivers of economic growth. In particular, some authors have discussed the financializing nature of the accumulation regime in Korea. The present study tests the financialization hypothesis by providing a theoretically-grounded empirical estimation of the contemporary growth regime in South Korea after 1997. Building upon post-Keynesian approaches, the impact of financialization on the growth regime is tested within a Bhaduri-Marglin framework. A system-equation of consumption, investment, and net exports is estimated for the 1998 to 2016 period. The empirical results indicate a shift to a profit-led demand regime after the Asian crisis that is associated with a change of the underlying macroeconomic dynamics. The striking feature of the post-1998 period is the negative marginal effect of an increase of the wage share on consumption, which signals a transition towards a consumption-driven profit-led regime.
Pauline Debanes is a fourth-year French Ph.D. candidate at EHESS in Paris. Before starting her research on financialization and the transformation of the role of the state in South Korea, she worked as an economic attaché at the French Embassy in Seoul for one year. Interested in comparing institutional change in Asia, she has edited a special issue entitled “Towards a Renewal of the Developmental State in Asia?” with Sébastien Lechevalier (Critique Internationale, 2014) and has co-authored an article comparing the financialisation of industrial policy in Japan and Korea (Structural Change and Economic Dynamics, 2017). She is currently based in Tokyo as part of a research project comparing the evolution of the National Innovation Systems of Japan and Korea.