This is the first Annual Report published in English by the Korea Development Institute (KDI) and contains all research activities and project results conducted in 2002 by KDI. The Annual Report, not only enhances KDI's recognition, it also discloses the origin of each research as well as shares research contents amongst KDI fellows internally creating a synergy effect that is essential in a comprehensive research institute.
Named as one of the most influential economic ‘Think Tank of Korea,’ KDI’s compilation of findings not only concentrates on its research activities, but also introduces individual as well as joint research projects led by KDI fellows, in hope, to become the ‘White Paper’ on Korean economic policy. In particular, by publishing all researches conducted in 2002 and the research focus of 2003, the Annual Report clearly indicates KDI's research direction for the year 2003.
The heart of this Report lies in Chapter 1, which contains the research summary. For the intention of this Report to be fully conveyed, the introduction of each research along with its background & purpose, summary and assessment are comprehensively dealt with in order to enhance the understanding of the readers. According to its respective research fields, each research is divided into 9 categories.
As KDI’s main agenda, Section 1 contains the post-assessment evaluation of macroeconomic forecasts made by KDI during 2002 and its summary is included in the appendix.
Section 2 incorporates research findings on the changes of the Korean economic structure and their effects. For research on the liberalization of the Korean economy, Dr. Shin, Inseok and Dr. Hahm, Sang-Moon analyzed stock price fluctuations between Korea and U.S. and through studies on their correlation, searched for the origin of this relationship as well as the level of Korean stock market's efficiency. Dr. Shim, Sangdal analyzed whether the effects of opening the domestic capital market after the crisis have helped the economic forecasting. Also, as stock prices and economic signals of the Business Survey Index (BIS) have improved, Dr. Shim suggested that using the BIS will significantly improve industrial forecasting. Dr. Hahn, Chin Hee, Dr. Shin, Inseok, and Dr. Cho, Dongchul examined the cause of the fluctuation in the trade balance indicating the effects of trade and financial market liberalization of the 1980s as the underlying cause of Korea's economic retrogression in the 1990s. In a study on Korea's household asset structure, Dr. Lim, Kyung-Mook, emphasized that the income level and risk asset factors best explain the household's participation pattern in stock market. Likewise, when considering the small size of household asset, the fixed cost needed to participate in the stock market would be the crucial factor that prevents households from freely participating in the stock market.