November 9, 2015 | U.S. Interest Rate Normalization and its Impact on Korea and the World Economy

After over seven years of near zero interest rates, the Federal Reserve may now be ready to raise rates, but is the world ready? Normalizing interest rates is expected to cause significant capital outflows from emerging economies, exposing debt burdens amassed in a period of cheap credit and depreciating local currencies against the dollar. In light of slowing global growth and the rising strength of the dollar, investors are concerned tighter U.S. monetary policy will precipitate a major financial crisis in emerging markets. Though advanced economies are projected to be less affected, the scale of another global crisis could disrupt U.S. and South Korean growth, reflected in recent IMF adjustments to its 2020 nominal GDP forecasts. On November 9, KEI and The Korea Society hosted a discussion with a panel of distinguished experts in the fields of financial risk and macroeconomics on how the inherent challenges for the global economy from higher interest rates will impact South Korea and the U.S.