Joseph masali’s Question

1. what does it mean when Susan Collins say that the 1973-79 big push heavily contributed to loss of competitiveness and to distorting allocation of credit and other resources?

The big push means Korean government strong construction of electric, heavy, and chemical industries.

As we learned from class, through government led credit supply and resource supply, there were over investments in each industry at the beginning. So it caused serious competitiveness drop mainly too much competition between domestic corporations

2. Another question is about the breathing space for economic policies.  Susan Collins says that there was breathing space for policies so when we take for instance the salary policy where president of korea fixed workers salary for 10years we see that as much as the policy was good it was also pain to workers due to inflation. So taking this policy as our example, who really gave breathing space for policies?

In early 80s, if we define 'breathing space' as a positive external factor to Korean economy, candidates for it would be stabilized oil price, international interest, and cheaper Korean Won.

Above factors partially helped the inflow of funds to Korea in the period.