IDEAS home Printed from https://ideas.repec.org/a/ris/eaerev/0352.html
   My bibliography  Save this article

The Effect of Quantitative Easing on Inflation in Korea

Author

Listed:
  • Nam, Min-Ho

    (Bank of Korea)

Abstract

This paper evaluates the whole impact of quantitative easing on inflation in Korea implemented by the central banks in four major advanced economies, the U.S., Euro Area, U.K. and Japan. According to the analysis employing a VAR-X model with the security holdings of those central banks an exogenous variable, quantitative easing is estimated to exert downward pressures on inflation in Korea. Considering the impulse responses of Korean macroeconomic variables to a quantitative easing shock, the spillover effect is transmitted through exchange rate channel while trade channel turns out to be ineffective. In an additional analysis assessing the impact of each quantitative easing program of the central banks, only those of the Fed and European Central Bank are estimated to be significant. The empirical results prove to be robust even if using long-term interest rates as an alternative indicator of quantitative easing.

Suggested Citation

  • Nam, Min-Ho, 2018. "The Effect of Quantitative Easing on Inflation in Korea," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 22(4), pages 507-529, December.
    • Handle: RePEc:ris:eaerev:0352
    DOI: 10.11644/KIEP.EAER.2018.22.4.352
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.11644/KIEP.EAER.2018.22.4.352
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.11644/KIEP.EAER.2018.22.4.352?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Quantitative Easing; Security Holdings; Spillover Effects; Exchange Rate and Trade Channel; Inflation in Korea; VAR-X;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:eaerev:0352. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: JE Lee (email available below). General contact details of provider: https://edirc.repec.org/data/kieppkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.