THE MACROECONOMIC IMPLICATIONS OF THE COVID-19 ECONOMIC CRISIS: THE CASE OF SOUTH KOREA

This paper examines the major impacts of COVID-19 on the Korean economy throughout 2020. Since the start of the pandemic, sectoral unevenness of growth, employment inequality, and corporate liquidity preferences have been accelerated. These patterns reflect a continuation of trends that have been developed since the 1997 Asian crisis. As the main approach in examining the economic effects of the COVID-19 crisis and the government policy implemented to cope with them, I focus on the unequal distribution of output and employment shocks across businesses, workers, and households, through which I derive the macroeconomic implications of the pandemic crisis for the Korean economy. Throughout 2020, South Korea has been witnessing income redistribution favorable to big corporations and banks and away from small businesses, non-standard workers, and low-income households. These widening disparities have important macroeconomic implications.