Why Two Bubbles Are Threatening Korea’s Recovery

Key parts of South Korea’s economy are running hot and authorities are under pressure to cool things down. But this is trickier territory for the central bank and it should be wary of trying.

This is a story of two bubbles: one in the property sector; the other, stratospheric spending on artificial intelligence. The former is within the abilities of officials to tackle. The latter brings real benefits — along with froth — to the export powerhouse, but its decidedly global scope means the government’s ability to exert influence is negligible. Both shape policy, and Seoul will have to deal with the aftermath.