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Inflation Persistence in Korea (in Korean)

Author

Listed:
  • Tae-Jeong Kim

    (Macroeconomics Team, Economic Research Institute, Bank of Korea)

  • Kwangyong Park

    (Department of Economics, Yonsei University)

  • Kumhwa Oh

    (Personnel & Administration Department (Secondee to IMF))

Abstract

This paper examines inflation persistence in Korea from various aspects; CPI and the core inflation, their sub-components, and the pass-through effects of import goods. Some international comparisons are presented and the sources for the persistence are analyzed by a vector autoregressive (VAR) model. And the structural changes in the persistence are also investigated thoroughly. Persistence indices were estimated as the sum of autoregressive coefficients by the grid bootstrap method of Hansen (1999). During the period of 2000-2011, the persistence index for the quarterly CPI inflation turned out to be almost 0, suggesting no persistence. On the other hand, the index for the core inflation has been stable since 1990 at the level of 0.6. Meanwhile, the persistences of CPI components show significant differences one another.

Suggested Citation

  • Tae-Jeong Kim & Kwangyong Park & Kumhwa Oh, 2012. "Inflation Persistence in Korea (in Korean)," Economic Analysis (Quarterly), Economic Research Institute, Bank of Korea, vol. 18(3), pages 1-37, September.
    • Handle: RePEc:bok:journl:v:18:y:2012:i:3:p:1-37
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    More about this item

    Keywords

    Inflation Persistence; Inflation Gap; Inflation Targeting;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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