In January 1979 Korea announced a ‘tight money policy’. This contrasted with 18 years of Keynesian policies which had resulted in high growth and double‐digit inflation. This article traces the development of monetarism from its initial inception in Korea to its complete official endorsement in mid‐1981. The impact on short term growth and Korea's ability to weather the oil price increases of 1979 are examined. The results so far appear disappointing in that inflation has been higher than in 1974–75, growth negative, and monetary targets consistently revised upwards. The government remains optimistic that the beneficial results are becoming apparent, but the question is posed as to whether the high growth trajectory based on export orientation of the past is consistent with the policies proclaimed.