A system dynamics perspective on the build-up to the 1997 South Korean financial crisis
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432313553-MIT.pdf
Description
Full printable version
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61.21 MB
Format
Adobe PDF
Checksum (MD5)
46f9dbbb138225cc70724f34d25a620b
Author(s)
Kopczynski, Jessica A., S.M. Massachusetts Institute of Technology
Advisor(s)
Brad Morrison.
Date Issued
2009
Publisher
Massachusetts Institute of Technology
Abstract
Financial panics and crashes have become an item of familiarity to many nations around the world over more than several centuries. If history has taught us nothing else, it has taught us that we can learn from the past with the aim of improving the future. In 1997 a chain of events was set off in Asia that culminated in financial panic and crisis for many of the East Asian countries. The research in this paper focuses on the economic environment in South Korea in the years immediately preceding the 1997 financial crisis. The financial liberalization policy of interest rate de-regulation is modeled using system dynamics and the resultant economic behavior is explored. The feedback structure of the model is used to explain the asset bubble that formed during the height of the build-up. The national reliance on short-term commercial paper to finance long-term investments is explored and its relationship to the crisis is discussed. System dynamics is used to model the policy decisions that were made and explore different policy decisions and scenarios to provide insight into the resulting economic behavior.
Description
Thesis (S.M.)--Massachusetts Institute of Technology, System Design and Management Program, 2009.
Includes bibliographical references (leaves 88-89).
Subjects
System Design and Management Program.
MIT Department
System Design and Management Program.
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