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What drives business cycles in Korea?

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  • Jung, Yongseung

Abstract

This paper sets up a two agent new Keynesian model to explore the driving forces in business cycles in Korea. It finds that the estimated share of constrained households increased after the Asian financial crisis. The estimated model via maximum likelihood shows that the technology shocks are important in the variations of output, while the monetary shocks have played a pivotal role in inflation variations. However, the contribution of the demand shock is negligible in explaining output and inflation variations in Korea.

Suggested Citation

  • Jung, Yongseung, 2019. "What drives business cycles in Korea?," Japan and the World Economy, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:japwor:v:52:y:2019:i:c:s092214251930043x
    DOI: 10.1016/j.japwor.2019.100978
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    Cited by:

    1. Yongseung Jung, 2022. "Inspecting Business Cycles in Korea through the Lens of the TANK Model," Korean Economic Review, Korean Economic Association, vol. 38, pages 109-139.

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    More about this item

    Keywords

    Maximum likelihood; Technology shock; TANK;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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