External Shocks and Inflation in the Trade-Dependent Korean Economy: A SVAR Approach

Title
External Shocks and Inflation in the Trade-Dependent Korean Economy: A SVAR Approach
Author(s)
여택동이민환[이민환]
Keywords
ENERGY PRICE-INCREASES; PASS-THROUGH; OPENNESS; GROWTH; COMPETITION
Issue Date
201311
Publisher
KOREA TRADE RESEARCH ASSOC
Citation
JOURNAL OF KOREA TRADE, v.17, no.4, pp.1 - 23
Abstract
This paper estimates the inflationary effects of globalization and other nonmonetary factors and then presents a statistical decomposition of the rate through a structural VAR using monthly and quarterly data. The major results of this study are summarized as follows: First, the CPI inflation rate in Korea reflects an increased exchange rate, import price inflation, and positive external demand. Second, the impacts of economic growth and import price on CPI inflation appeared relatively greater. Third, the inflationary effects of external shocks using the quarterly data are similar to those using monthly data except for the impact of oil price inflation shock In conclusion, nonmonetary international factors influenced inflation dynamics in Korea in addition to the monetary shocks. Therefore, it is recommended that in order to reduce excessive fluctuation in CPI inflation, an import-dependent economy such as Korea should ease its excessive dependence on high-cost foreign intermediates over the long-term through import-substitution policies and allow a real appreciation of the domestic currency.
URI
http://hdl.handle.net/YU.REPOSITORY/28462
ISSN
1229-828X
Appears in Collections:
상경대학 > 국제통상학부 > Articles
Files in This Item:
There are no files associated with this item.
Export
RIS (EndNote)
XLS (Excel)
XML


qrcode

Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.

BROWSE