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Assessing Macroprudential Policies: Case of South Korea


  • *We are grateful to the guest editors and to two referees for their comments and guidance on an earlier draft. We also thank seminar participants at the IMF for their comments. H. S. Shin was involved in the design of the macroprudential policy tools introduced in Korea in 2010, and hence is not a disinterested party regarding the findings reported in this paper.


In this paper, we develop methods for assessing the sensitivity of capital flows to global financial conditions. We use these methods to assess the impact of macroprudential policies introduced by South Korea in 2010. Relative to a comparison group of countries, we find that the sensitivity of capital flows into South Korea to global conditions decreased in the period following the introduction of macroprudential policies.