Part I. Economic Structures and Macroeconomic Performances

1. Financial and Structural Reforms in the Aftermath of Financial Crises:Lessons from International Experience for Korea
Daniela Klingebiel

Introduction
Major Structural Reform Issues in the Postcrisis Phase
　 Financial and Operational Restructuring for Corporate and Financial Sectors
　 Reducing Government’s Role and Changing Ownership
　 Structures in the Economy
　 Strengthening Creditor Rights
　 Strengthening Corporate Governance
　 Enhancing the Regulatory and Supervisory Framework
　 Improving the Disciplinary Role of Markets and Depositors
　 Strengthening the Framework for Competition
Lessons for Korea
　 Structural Weaknesses in the Korean Economy Prior to the Crisis
　 Lessons from International Experience for Korea

2. Postcrisis Growth and Bankruptcy Policy Reform in Korea: Empirical Evidence
Chin Hee Hahn and Youngjae Lim

Introduction
The Role of TFPG in Postcrisis Growth Performance
　 Basic Facts
　 “Changes in Growth Accounting”: TFPG vs. Input Accumulation
　 Some Remarks on the Role of Capital Accumulation
Bankruptcy Policy and Allocation Efficiency before and after the Korean Crisis
　 Bankruptcy Policy before and after the Crisis
　 Performance of the Court-Administered Bankruptcy System before and after Reform
Concluding Remarks
Appendix: Data Description

COMMENTS
　Kyungsoo Choi
　Jon Blondal

Part II. Factor Market Structures and Macroeconomy

3. Financial Structure and Macroeconomic Performance over the Short and Long Run
Jose A. Lopez and Mark M. Spiegel

Introduction
Financial Development and Long-Run Economic Growth
　 Literature Review
　 Methodology
　 Results
　 Panel Evidence on Financial Development and Income Volatility
Financial Development and Short-Term Fluctuations
　 Cross-Sectional Evidence
　 Korea in the 1990s
Policy Implications for Asian Nations
Conclusion

4. Macroeconomic Implications of Financial Market Reforms in Korea
Joon-Ho Hahm

Introduction
Financial Development and Economic Performance in Precrisis Korea
Financial Reform and Postcrisis Transition in Financial Structure
　 Financial Industry Consolidations and Capital Market Reforms
　 Shifts in Corporate Financing Patterns and Bank Portfolio Structures
　 Transition toward a More Market-Based Financial System
Macroeconomic Implications of the Postcrisis Financial Transition
　 Improved Resource Allocation: Productivity and Cost Gains
　 Improved Risk Sharing, Monitoring, and Resolution Schemes
　 Systemic Risk Implications of Financial Disintermediation and Bank Consolidations
　 Shift in Bank Asset Portfolios: Implications on Savings and Business Cycle
　 Financial Globalization and Vulnerability to External Shocks
Policy Implications and Concluding Remarks

5. Labor Markets in the United States and Korea: Factor Proportions, Inequality, and Unemployment
Robert Topel

Introduction
Wages, Inequali132ty, and Factor Proportions
　 U.S. Data
　 The Evolution of Wages: 1967.2000
Unemployment, Nonparticipation, and Nonemployment in the United States
　 Incidence and Duration of Jobless Spells in the United States
Unemployment, Nonemployment, and Wages
　 Wage Changes, Labor Supply, and Nonemployment
Conclusions: What Can We Learn from American Labor Markets?
Appendix: A Brief Primer on Collective Bargaining Institutions in the U.S.

6. Macroeconomic Policy Implications of Labor Market Changes in Korea
Kyungsoo Choi

Introduction
Overview of Postcrisis Labor Market Changes
Employment Changes during the Crisis
Changes in Labor Turnover Patterns
Implications for Macroeconomic Policy Making

COMMENTS
　Dongchul Cho
　Carl E. Walsh
　Young-Sun Koh
　Daniela Klingebiel

Part III. Implications of Structural Changes on Macropolicy Schemes

7. Economic Structure and Monetary Policy Design
Carl E. Walsh

Introduction
Institutional Structure and Policy Objectives
　 Institutional Structure
　 Policy Objectives
　 Policy Implementation
Monetary Targeting
　 The United States
　 Germany and Switzerland
　 Lessons
The Rise of Inflation Targeting
　 Who Targets Inflation?
　 Implementing Inflation Targeting
　 Instrument Rules for Inflation Targeting
　 Inflation Forecasts as Intermediate Targets
　 Inflation-Targeting Rules
　 Criticisms of Inflation Targeting
　 Alternatives to Inflation Targeting
Conclusions

8. Postcrisis Structural Changes and Monetary Policy Scheme in Korea
Dongchul Cho

Introduction
Evolution of Monetary Policy after the Crisis
Monetary Policy in an Open Economy
　 Theoretical Discussion on MCI
　 A Crude Measure of MCI for the Korean Data
Summary and More Issues on Monetary Policy in Korea

9. Achieving Fiscal Consolidation: Lessons from OECD Member Countries on Institutional Arrangements for Budgeting
Jon Blondal

Introduction
Institutional Arrangements for Budgeting
　 Medium-Term Budget Frameworks
　 Prudent Economic Assumptions
　 Top-Down Budgeting Techniques
　 Relaxing Input Controls
　 An Increased Focus on Results
　 Budget Transparency
　 Modern Financial Management Practices
Conclusion
Appendix: OECD Best Practices for Budget Transparency

10. Fiscal Consolidation after the Crisis: Prospects and Strategies
Young-Sun Koh

Introduction
Background
　 Public Finance in the 1970s
　 Fiscal Tightening in the 1980s
　 Economic Crisis and Ballooning Budget Deficit
Current State of Government Finance
　 Fiscal Balance
　 Government Liabilities
　 Functional Classification of Expenditures
　 Government Expenditures in National Accounts
　 Discretionary Spending and Mandatory Spending
Major Risk Factors in Fiscal Management
　 Future Development of Government Finance
　 Cost of Financial Restructuring
　 Implicit Liabilities of Public Pension Schemes
　 Simultaneous Increases in Government Assets and Liabilities
　 Liabilities of Public Corporations, Including the Bank of Korea
　 Weakening Fiscal Discipline
Strategies for Fiscal Consolidation
　 Containing Expenditure Growth
　 Enhancing the Allocative and Technical Efficiency of Expenditures

COMMENTS
　Chin Hee Hahn
　Mark M. Spiegel
　Joon-Ho Hahm
　Robert Topel

Part IV. Reflections on IMF Policy Prescriptions

COMMENTS
　Hubert Neiss