Do presidential approval ratings affect exchange rates? The empirical purview of the vast literature on this topic has been confined to the run-up to elections. The importance of approval ratings in non-election periods has therefore been under-studied. Examining daily data on the exchange rate of the Korean won during the presidency of Park Geun Hye, we find that the won weakened (1) when Park’s ratings were low and (2) when they bounced back unexpectedly from a low level. This finding explains why Park’s impeachment did not lead to a serious panic in the won market. It seems that well before the impeachment, the exchange rate already reflected the market’s concerns about the uncertainty in the government.
Presidential Approval Ratings and the Foreign Exchange Market: The Korean Won under the Park Guen Hye Government
Byunghwan Son is an Associate Professor of Global Affairs at George Mason University. His research has appeared in the Journal of Politics, Journal of Peace Research, Foreign Policy Analysis, and Political Studies, among others. Email: <firstname.lastname@example.org>.
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Byunghwan Son; Presidential Approval Ratings and the Foreign Exchange Market: The Korean Won under the Park Guen Hye Government. Asian Survey 1 October 2021; 61 (5): 767–796. doi: https://doi.org/10.1525/as.2021.1412754
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