• Journal of Service Research and Studies
• /
• v.3 no.2
• /
• pp.1-17
• /
• 2013

The main purpose of this paper is to examine the aid effectiveness of ODA projects through a case of an e-Government ODA. The case at hand is the Mongolian National Data Center project, which was supported by Korea International Cooperation Agency in 2007~2009. In this paper, we analyze aid effectiveness through a case instead of a long-term macroeconomic analysis. By using OECD DAC guideline for performance evaluation of ODA project combined with PRM (Performance Reference Model) for evaluating e-Government, authors undertakes a post-implementation evaluation on the Mongolian NDC project. The result shows that the NDC project has been relevant and implemented effectively and efficiently given the political instability incurred by the election fraud in 2008. However, there have been problems as well. Provision of defected monitors was a critical problem while disagreement on the safety of the building was lasted for two more years to be settled. Some comments on the training program are also worth to hear to ameliorate similar projects. But more fundamental problems are found in impacts and sustainability areas. Low political status of ICTPA as a coordinating organization for ICT ODA and unstable job security of NDC are serious hurdles to increase effectiveness and efficiency of NDC. ICTPA has played very limited roles in coordinating government-wide ICT ODA projects because it lacks actual power and control over them. Other government organizations do not fully trust NDC as a reliable government data center due to low political status and lack of job security. Thus critical factors to affect the effectiveness and efficiency of e-Government ODA projects are political and organizational instead of economic.

• Environmental and Resource Economics Review
• /
• v.29 no.2
• /
• pp.171-194
• /
• 2020

We revisit the impact of oil shocks on the Korean economy and examine how this impact varies depending on a business cycle. First, we estimate the probability of a recession through a logistic probability distribution, and correct the probability to match business cycles announced by the Korea National Statistical Office. We set up a STVAR model to analyze the response of macroeconomic variables to oil shocks according to business cycles. We find that oil shocks during the recession have a negative effect on GDP in the mid- and long-term, but during the expansion, GDP does not show a statistically significant response to oil shocks. We presume that this finding is associated with the factors of both the increase in demand for consumption and the increase in current account during the economic boom. Also, we find that the impact of oil shocks on the price level was also observed differently in terms of the persistence of inflation by business cycle. These results highlight the importance of an application of a regime switching model, which has been widely used in energy economics in recent years.

• International Area Studies Review
• /
• v.14 no.1
• /
• pp.77-97
• /
• 2010

Recently, countries on the Caspian Sea were had heavily interested due to instability of international resource market. These countries having been developed basing on energy exports, especially Kazakhstan have drastically grown during a decades. However economy, heavily relied on the exports of energy, is influenced on fluctuation in the international energy price as well as sometimes exposed at Dutch disease. These days, Kazakhstan, increased trade and investment with Korea, has been on the rise as new supplier for energy. Therefore, economic change in Kazakhstan can be an important issue. In this paper, we analyze relations among oil price, interest rate, and real exchange rate during sample period from January 1999 to December 2008 expanding Balasa-Samuelson model. Empirical results present that oil price, interest rate, and real exchange rate mutually keep their balance. Eventually, we find out Kazakhstan has exposed at Dutch disease since oil price and interest rate have negative impacts on real exchange rate respectively.

• KDI Journal of Economic Policy
• /
• v.30 no.1
• /
• pp.1-31
• /
• 2008

Various opinions have been suggested to explain the slump in equipment investment, such as increased government regulations, shareholder-oriented management by expanded foreign equity investment, response against M&A threats, conservative investment trends seen after a series of bankruptcy of large conglomerates (amidst crumbling myth of "Too Big to Fail"), and financial restructuring. Some also argued that the increased uncertainty in business environment is mainly responsible for conservative management, though there are few domestic studies made regarding the situation. But, in other countries, including the U.S., studies have shown that more volatility is seen now surrounding stock prices, profitability, and sales growth rate reflecting business performance. Also, there are other studies showing such expanded volatility have led to conservative management by businesses. In this regard, this study reviews the volatility conditions of business performance of Korean companies based on profitability, and then attempts to analyze the impact on investment brought on by increased volatility. Each company's profitability volatility used here is from the standard deviation of companies for the past five years. As a profitability indicator, the ROA (= operating profit/total asset) is used. According to the analysis, profitability volatility has remarkably increased from the mid 3% in 1994 to low 5% in 2005. Profitability volatility of the Korean companies has expanded to a great extent since the financial crisis. The crisis might have served to raise the volatility in the macroeconomic conditions. If increased volatility observed during the economic crisis had gradually declined after the crisis, the situation could be interpreted as a temporary phenomenon, not to be too concerned over. But, this was not the case for Korea. The volatility level, after the crisis, has not dropped back to its pre-crisis level. Hence, in the Korea's case, high volatility cannot be explained by the impact of financial crisis. Not only that, the fact that such expansion is seen in every industrial sector indicates that this phenomenon cannot be explained by the composition change of industries alone. An undergoing study shows that with a rapid spread of globalization, industries fiercely competing with China experience more volatility. Such increased volatility tends to contract investment, and since the crisis the impact of volatility on investment has slightly increased. It is noteworthy that this study only includes a part of 'uncertainty' that could be measured statistically. For instance, the profitability volatility indicator used in this study is unable to reflect all the effects that the tacit reduction of protection by the government or regulations might have made. So, the result here also indicates that other 'uncertain' factors not mentioned in this study may have served to contract investment sentiment. It would be impossible for policies to completely remove uncertainties measured by profitability volatility, but at least it is necessary to put effort to reduce the macroeconomic volatility in the future economic management. Stabilized macroeconomic management may not be enough to diminish all volatility that occurs within each company, but it would make a meaningful contribution in encouraging investment.

• International Area Studies Review
• /
• v.12 no.3
• /
• pp.419-448
• /
• 2008

The objective of this study is to conduct a quantitative assessment of potential impacts on the Korean economy of Agreement on Trade in Services Under the Framework Agreement on Comprehensive Economic Cooperation Among the Governments of the Republic of Korea and the Member Countries of the Association of Southeast Asian Nations which was signed on 21 November 2007 using a Computable General Equilibrium (CGE) model. Tariff equivalents of services were calculated on the basis of concessions made in the Agreement between Korea and ASEAN member countries. The empirical analysis shows that Korea is to get an additional gain in real GDP of 0.04 percent and in welfare of US$106 million, with an increase in per capita utility of 0.03 percent. Total exports and imports of Korea are to rise by US$179 million and $191 million, respectively, causing a trade deficit of $12 million. Korea's exports to ASEAN member countries will increase by $108 million and Korea's imports from them will rise by $278 million, giving rise to a trade deficit of $170 million.

• International Area Studies Review
• /
• v.13 no.3
• /
• pp.695-728
• /
• 2009

This study aims to conduct a quantitative assessment of potential economic impacts on the Korean economy of the concessions of the Korea-U.S. FTA (KORUS FTA) which was signed on April 1, 2007 using a dynamic computable general equilibrium (CGE) model, with all sectors, including agriculture, manufacturing sectors and services industry, considered for simulations. In addition, the timing of trade liberalization based on the concessions agreed on in the KORUS FTA talks for all sectors is explicitly considered. Major findings of this study are that Korea' real GDP would rise by 4.67%~4.99% by 2023 and the contribution of liberalization of services trade to Korea's economic growth would be 0.3%~0.62% points. Trade liberalization in service sectors would lead to lowered import prices and an increase in FDI, which are to contribute to an higher output and exports of sectors which make an intensive use of imported inputs and finally a higher economic growth of the Korean economy as a whole. For that to happen, a ratification of the KORUS FTA by the National Assembly of Korea and the U.S. Congress is required.

• International Area Studies Review
• /
• v.14 no.3
• /
• pp.423-453
• /
• 2010

This study aims at quantifying potential economic effects on the Korean economy of a China-Korea FTA and a Japan-Korea FTA using a dynamic computable general equilibrium (CGE) model. Most of the previous studies on them used static CGE models. Key findings of this study are that a China-Korea FTA would lead to a higher increase in Korea's exports and economic growth than a Japan-Korea FTA and that both a China-Korea FTA and a Japan-Korea FTA would cause additional trade deficits to Korea, which would be minuscule compared to Korea' economic trade volume. Since potential economic impacts on Korea's industry output and exports by sector of a China-Korea FTA and a Japan-Korea FTA are forecast to be complementary, i.e., major sectors which would run trade deficits from a Japan-Korea FTA would run trade surpluses from a China-Korea FTA, a simultaneous pursuit of both a China-Korea FTA and a Japan-Korea FTA would be more desirable and beneficial to Korea. This study shows that a dynamic CGE model which can take explicit account of international capital mobility and ownership is required for more precise estimation of effects of the FTAs.

• KDI Journal of Economic Policy
• /
• v.14 no.1
• /
• pp.147-165
• /
• 1992

This paper analyzes the macroeconomic effects of elections on the Korean economy and their future ramifications. It measures the shocks to the Korean economy caused by elections by taking the average of sample forecast errors from four major elections held in the 1980s. The seven variables' Bayesian Vector Autoregression Model which includes the Monetary Base, Industrial Production, Consumption, Consumer Price, Exports, and Investment is based on the quarterly time series data starting from 1970 and is updated every quarter before forecasts are made for the next quarter. Because of this updating of coefficients, which reflects in part the rapid structural changes of the Korean economy, this study can capture the shock effect of elections, which is not possible when using election dummies with a fixed coefficient model. In past elections, especially the elections held in the 1980s, $M_2$ did not show any particular movement, but the currency and base money increased during the quarter of the election was held and the increment was partly recalled in the next quarter. The liquidity of interest rates as measured by corporate bond yields fell during the quarter the election and then rose in the following quarter, which is somewhat contrary to the general concern that interest rates will increase during election periods. Manufacturing employment fell in the quarter of the election because workers turned into campaigners. This decline in employment combined with voting holiday produce a sizeable decline in industrial production during the quarter in which elections are held, but production catches up in the next quarter and sometimes more than offsets the disruption caused during the election quarter. The major shocks to price occur in the previous quarter, reflecting the expectational effect and the relaxation of government price control before the election when we simulate the impulse responses of the VAR model, imposing the same shocks that was measured in the past elections for each election to be held in 1992 and assuming that the elections in 1992 will affect the economy in the same manner as in the 1980s elections, 1992 is expected to see a sizeable increase in monetary base due to election and prices increase pressure will be amplified substantially. On the other hand, the consumption increase due to election is expected to be relatively small and the production will not decrease. Despite increased liquidity, a large portion of liquidity in circulation being used as election funds will distort the flow of funds and aggravate the fund shortage causing investments in plant and equipment and construction activities to stagnate. These effects will be greatly amplified if elections for the head of local government are going to be held this year. If mayoral and gubernatorial elections are held after National Assembly elections, their effect on prices and investment will be approximately double what they normally will have been have only congressional and presidential elections been held. Even when mayoral and gubernatorial elections are held at the same time as congressional elections, the elections of local government heads are shown to add substantial effects to the economy for the year. The above results are based on the assumption that this year's elections will shock the economy in the same manner as in past elections. However, elections in consecutive quarters do not give the economy a chance to pause and recuperate from past elections. This year's elections may have greater effects on prices and production than shown in the model's simulations because campaigners' return to industry may be delayed. Therefore, we may not see a rapid recall of money after elections. In view of the surge in the monetary base and price escalation in the periods before and after elections, economic management in 1992 should place its first priority on controlling the monetary aggregate, in particular, stabilizing the growth of the monetary base.

• Hwankyungkyoyuk
• /
• v.4 no.1
• /
• pp.89-211
• /
• 1993

The Korean government embarked upon ambitious economic development plans in the 1960's the goals of development policy at that time were the elimination of absolute poverty and the alleviation of unemployment. With scant natural resources, the government had to push for industrialization based upon borrowed foreign raw materials with surplus local labor. Preoccupation with the economic goals of industrialization and export expansion left little room for considering environmental protection. It is evident that Korea's exported industrialization strategy of the past three decades has been a success in terms of income, production, and other macroeconomic indicators, but it cannot be denied that a host of undesirable side-effects have been created. These include environmental problems. congestion in several large cities, poor wealth distribution, and regional disparities. The environmental problems were recognized even in the early stage of development, but preoccupation with the pending economic goals of industrialization and export expansion left little room for considering environment protection. The perceived and actual seriousness of the problems, however, has reached such a level that further negligence may imperil political stability and developmental problems facing the world arise from a world economic order characterized by ever expanding consumption and production, which exhausts and contaminates natural resources and creates and perpetuates gross inequalities between and within nations. It will be necessary to develop new culture and ethical values, transform economic structures, and reorient, our lifestyles. Changing lifestyles can not be promoted by government policy initiative alone but through self=generated educational efforts and mutual training by people themselves. The citizens group for environment (NGOs) should assume these educational and training responsibilities starting from grass-root level of people. It must be reawakened to the reality that the environmental preservation for better quality of life is based on the development of human relationships, creativity, spirituality, reverance for the natural world and celebration of life, and is not dependent upon increased consumption of non-basic material goods. To carry on such environment education social movements and NGOs should (1) provides educational methodologies, which focus on values clarification and moving beyond clarification and moving beyond blame to constructive action. (2) provide training for leaders of business and industry, government, union and others on consumption and production. (3) initiate and support the training and work of environmental counselor who encourage responsible consumption. (4) cooperative with media to initiate and strengthen educational programs on the social environmental programs on the social environmental impacts of consumption and production and to build awareness of consumer responsibility and potential. Economic and social development can be compatible with environment protection : both can be achieved simultaneously. Effective environmental management depends on the various factors : political will, institutional arrangements, appropriate legislation, and availability of the requistite financial and technological resources, which is possible with a strong public awareness of the importance of environmental preservation.

• Environmental and Resource Economics Review
• /
• v.33 no.1
• /
• pp.1-32
• /
• 2024

The emissions trading system stands as a pivotal climate policy in Korea, incentivizing abatement equivalent to 87% of total emissions (as of 2021). As the system likely has a far-reaching impact, it is crucial to understand how the real economic activity, energy sector, as well as environment would be influenced by its implementation. Employing a macroeconometric model, this paper is the first study analyzing the effects of the Korean emissions trading policy. It interconnects the Korean Standard Industrial Classification (Economy), Energy Balance (Energy), and National Inventory Report (Environment), enhancing its real-world explanatory power. We find that a 50% increase in emission permit price over four years results in a decrease in greenhouse gas emissions (-0.043%) and downward shifts in key macroeconomic variables, including real GDP (-0.058%), private consumption (-0.003%), and investment (-0.301%). The price increase in emission permit is deemed crucial for achieving greenhouse gas reduction targets. To mitigate transition risk associated with price shocks, revenue recycling using auction could ensure the sustainability of the economy. This study confirms the comparative advantage of expanded current transfers expenditure over corporate tax reduction, particularly from an economic growth perspective.