Go to the World Bank’s databank website at http://databank.worldbank.org/data/reports. aspx?source=2&country=. Find the following annual data for South Korea (the Republic of Korea) and Thailand, for the past 25 years: (i) GDP at current US$ prices; (ii) Net foreign direct investment, in current US$; (iii) the current account balance, in current US$;

(iv) the average official exchange rate. Download the data into a spreadsheet, and make sure the data align correctly with the appropriate date. Calculate annual GDP growth for each year over the period. Calculate the values of net foreign direct investment and current account balance as percentage of GDP.

a. For both countries, for the period 1995 to 1999, compare and analyze the changes in net foreign direct investment to GDP, the current account balance, and the average official exchange rate.

Do you see significant shifts, in line with what this chapter has discussed? Compare these data with the data on GDP growth. Comment on the relationship.

What relationship do you see between the GDP growth rate, external account deterioration, and the exchange rate for both countries?

b. For both countries, analyze the same data for the subsequent period, until the most recent year you could find. Comment on the effects of the 1997–1998 financial crisis on GDP.
Compare the years before the 1997–1998 crisis, the crisis years, and the immediate aftermath, with the data you have for the most recent five years. What is the difference?