Effects of noe-economic factors on the cyclcal fluctuations of price level in Korea

There are a number of studies on the peculiarities of inflation in underdeveloped economies. These studies are, however, confined to the cases of Latin American countries, and the essence of methodologies applied in the studies is basically estimations of linear parameters of an extended quantity equation with lagged variables. As it is generally observed, inflation in most of underdeveloped economies are, to some extent, affected by non-economic factors such as political instability, social disorder, abrupt institutional changes, etc. Sometimes, these factors underlying the basic movement of price level change are reflected in such variables as quantity of money supply, income velocity, gross national product.