Introduction to Macroeconomics

Course Description

Few economies in modern history have transformed as dramatically as South Korea's. In 1953, South Korea was poorer than most of sub-Saharan Africa. By 2024, it sat among the world's twelve largest economies, with per capita GDP exceeding that of Japan in PPP terms and an industrial base capable of dominating global semiconductors, displays, batteries, and shipbuilding. The Korean economy is, in effect, a sixty-year working experiment in macroeconomic policy — making Seoul one of the most instructive places in the world to study macroeconomics.

This course introduces the fundamental concepts of macroeconomics — GDP and growth, inflation, unemployment, money and banking, fiscal and monetary policy, international trade and finance — using South Korea (and comparison cases from across Asia) as the primary applied context. No prior economics coursework is required. The course is designed to make students confident readers of economic news and informed participants in policy debates, with a particular ear for the questions that matter in Asia's twenty-first century.

Aligned with the UN Sustainable Development Goals

Macroeconomics is central to most SDG progress. This course engages most directly with SDG 1 (No Poverty), SDG 8 (Decent Work and Economic Growth), SDG 9 (Industry, Innovation and Infrastructure), SDG 10 (Reduced Inequalities), and SDG 17 (Partnerships for the Goals).

Key Topics

Learning Objectives

By the end of this course, students will be able to:

1. Define and apply the core measurement concepts of macroeconomics (GDP, inflation, unemployment) and read economic data critically.

   Assessment: Assessment: Data interpretation exercise using OECD and Bank of Korea sources.

2. Explain the dynamics of long-run economic growth and apply growth-theory frameworks to the Korean development trajectory.

   Assessment: Assessment: Short paper analyzing one phase of Korean growth (1960s–1980s, 1990s, or post-2000).

3. Analyze the role of monetary and fiscal policy in stabilizing economies, with specific reference to the Bank of Korea and Korean fiscal practice.

   Assessment: Assessment: Policy memo on a current Bank of Korea decision.

4. Evaluate the strengths and limits of the East Asian developmental state model, comparing Korea with Japan, Taiwan, China, and Vietnam.

   Assessment: Assessment: Comparative essay (2,000 words).

5. Apply macroeconomic analysis to a current global or Asian policy challenge — demographic decline, energy transition, US-China decoupling, or AI-driven productivity.

   Assessment: Assessment: Final research paper and presentation.

Course Format and Assessment Methods

Total grade is composed of the following weighted components:

Course Outline

The course is organized into the following sessions, which may be combined or expanded depending on summer vs. semester format.

1. Why Macroeconomics, and Why Korea
   The questions macroeconomics asks, the data it uses, and why Korea is one of the world's most instructive applied cases.
2. Measuring the Economy
   GDP, nominal vs real, PPP, growth rates, the limits of GDP, and a tour of Korean economic statistics.
3. Long-Run Economic Growth
   Theories of growth (Solow, endogenous, institutional) applied to Korea's six decades of transformation.
4. The Korean Developmental State
   Park Chung-hee's industrial strategy, EPB planning, the chaebol bargain, and the policies that built the Korean miracle.
5. Inflation and Price Stability
   What causes inflation, how it's measured, the Phillips curve, and the inflation-targeting framework of the Bank of Korea.
6. Unemployment and Labor Markets
   Korean labor-market dynamics: youth unemployment, gender gaps, immigration, and the dual labor market.
7. Money, Banking, and Financial Crises
   The Korean banking system, the 1997 IMF crisis, post-crisis reforms, and lessons learned.
8. Monetary Policy and the Bank of Korea
   How the BOK conducts policy, what its tools are, and how it responds to global financial shocks.
9. Fiscal Policy
   Korean fiscal practice, the role of government, debt dynamics, and the politics of fiscal choice.
10. International Trade
    Trade theory, the Korean export model, current trade tensions, and what US-China decoupling means for Korea.
11. Foreign Exchange and the Won
    Exchange-rate dynamics, capital flows, and the won's volatility in the era of US monetary tightening.
12. Comparative Asian Development
    Korea vs Japan vs Taiwan vs China vs Vietnam — what worked, what didn't, and what travels.
13. Demographic Decline and the Korean Future
    The lowest fertility rate in the world, an aging population, and the macroeconomic stakes.
14. Capstone: Research Presentations
    Final research-paper presentations.

Field Visits and Guest Speakers

Seoul is the city as classroom. Course-related field components vary by term and availability, but examples include:

• Visit to the Bank of Korea Museum and headquarters in central Seoul.
• Seminar at the Korea Development Institute (KDI) — one of Asia's leading economic policy think tanks.
• Guest lecture from a Bank of Korea economist or former Ministry of Economy and Finance official.
• Industry visit to a major Korean exporter — Hyundai, Posco, or a leading chaebol manufacturing facility.
• Visit to Seoul's financial district (Yeouido) and panel with practitioners from Korean banks or asset managers.

Readings & Resources

Selected readings and resources for this course. Full syllabus and reading list provided at enrollment.

Books

Acemoglu, Daron, and James A. Robinson. Why Nations Fail: The Origins of Power, Prosperity, and Poverty. New York: Crown, 2012.

Amsden, Alice H. Asia's Next Giant: South Korea and Late Industrialization. New York: Oxford University Press, 1989.

Kim, Eun Mee, and Mary C. Brinton, eds. The Park Chung Hee Era: The Transformation of South Korea. Cambridge, MA: Harvard University Asia Center, 2013.

Krugman, Paul, Maurice Obstfeld, and Marc Melitz. International Economics: Theory and Policy. 12th ed. Pearson, 2022.

Mankiw, N. Gregory. Principles of Macroeconomics. 10th ed. Cengage, 2023.

Studwell, Joe. How Asia Works: Success and Failure in the World's Most Dynamic Region. New York: Grove Press, 2013.

Films and Recordings

Asianometry. 2023. The Korean Economic Miracle. YouTube documentary series.

BBC. 2024. South Korea's Demographic Crisis. Documentary.

Bloomberg Originals. 2024. Inside the Bank of Korea. Video.

Articles and Reports

Bank of Korea. 2024. Monetary Policy Report.

IMF. 2024. Republic of Korea: Article IV Consultation.

Krugman, Paul. 1994. "The Myth of Asia's Miracle." Foreign Affairs.

Lee, Jong-Wha. 2017. "Knowledge for Growth: Industrial Policy and the Korean Experience." Korea Development Institute.

OECD. 2024. OECD Economic Surveys: Korea.

World Bank. 1993. The East Asian Miracle: Economic Growth and Public Policy.