Financial Factors in the Business Cycle of a Small Open Economy: The Case of Korea

Title
Financial Factors in the Business Cycle of a Small Open Economy: The Case of Korea
Author(s)
이준희이우헌[이우헌]
Keywords
MONETARY-POLICY; ACCELERATOR; MODEL; CONSTRAINTS; FRICTIONS; SHOCKS
Issue Date
201311
Publisher
SPRINGER
Citation
OPEN ECONOMIES REVIEW, v.24, no.5, pp.881 - 900
Abstract
Financial factors influencing the business cycle have received considerable attention in recent years in the aftermath of the global financial crisis in 2008. This paper examines the role of financial factors in the business cycle by considering Korea, a small open economy, that experienced a severe financial crisis in 1997 as well as the recent global financial crisis. We estimate small open economy Bayesian DSGE (dynamic stochastic general equilibrium) models with financial factors and analyze the role of these financial factors in the business cycle in the context of Korea. The results indicate that the model based on an endogenous financial accelerator and a modified monetary policy rule provides a better explanation to the data than that without the financial factors and justify the recent attention to financial factors influencing the business cycle.
URI
http://hdl.handle.net/YU.REPOSITORY/28525http://dx.doi.org/10.1007/s11079-013-9272-x
ISSN
0923-7992
Appears in Collections:
상경대학 > 국제통상학부 > Articles
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