This paper tests the stability of the exchange market pressure model in the case of Korea under a managed floating exchange rate. Using the cusum of squares test, we show that the structural stability was broken in about mid-1986. This is plausible given that there was a sudden surplus in the...

The current study examines the relationship between FDI inflows and economic growth of Korea and tests the Bhagwati hypothesis which says that FDI inflow is more beneficial to economic growth in an open trade regime in a multivariate framework. Unlike previous works on the concerned hypothesis,...