• KDI Journal of Economic Policy
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• v.33 no.1
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• pp.1-44
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• 2011

Terms of trade shocks have been considered one of the main driving forces causing business cycle fluctuations in small open economies. Despite their importance in business cycles of small open economies, it is hard to find a serious study in existing literature investigating their implications on monetary policy under a small open economy. Considering it, this paper studies what form of monetary policy rule is the most adequate for a small open economy where terms of trade shocks are dominant factors in generating its business cycle fluctuations. For this purpose, various implementable monetary policy rules frequently analyzed in existing literature are compared in terms of social welfare levels which they can provide for the economy respectively. Main results of this paper can be summarized as follows. First, for a small open economy where terms of trade shocks are main driving forces of its business cycle fluctuations, the nontradable goods price inflation targeting can provide higher level of social welfare than other traditional monetary policy rules such as the CPI inflation targeting or the fixed exchange rate regime. Second, the social welfare improvement of the non-tradable goods price inflation targeting is more apparent when export goods price shocks are more important than import goods price shocks.

• Proceedings of the Safety Management and Science Conference
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• 2009.04a
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• pp.109-121
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• 2009

In these OECD countries, left-wingers Government focus on unemployment, but right -wingers Government cares more about inflation. It is that inflation and unemployment don't have differential effects across rich and poor and the happiness levels of these two groups are unaffected by identity of the Government in power. The poor people choose to left-wingers Government, but rich people prefer to right -wingers Government. I estimate whether above opinion is correct or not. Especially I check how my results change when I control for aggregate economy activity and government consumption, two variables that could be correlated with inflation and unemployment and affect each Government's happiness differentially. This paper, and I believe much of the happiness literature, can be understood as an application of experienced utility, a conception that emphasis the pleasures derived from private consumption and sentiment of it. In Granger Causality test, private consumption sentiment index related with industrial production interactively in Korea. The business cycles affect on private consumption sentiment index.

• KDI Journal of Economic Policy
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• v.36 no.3
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• pp.1-23
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• 2014

This paper has studied the monetary policy in Korea with a time varying VAR model using four key macroeconomic variables. First, inclusion of the exchange rate was a crucial factor in evaluating Korean monetary policy since the monetary policy demonstrated sensitivity to exchange rate movements during the crisis periods of both the Asian financial crisis of 1997 and the global financial crisis of 2008. Second, a specification of the stochastic volatilities in TVP-VAR model is important in explaining excessive movements of all variables in the sample. The overall moderation of variables in 2000s was more or less due to a reduction of the stochastic volatilities but also somewhat due to the macroeconomic fundamental structures captured by impulse response functons. Third, the degree of the monetary policy effectiveness of inflation was mitigated in recent periods but with increased persistence. Lastly, the monetary policy stance towards inflation stabilization has advanced ever since the inflation targeting scheme was adopted. However, there still seems to be a room for improvement in this aspect since the degree of the monetary policy stance towards inflation stabilization was relatively weaker than to output stabilization.

• KDI Journal of Economic Policy
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• v.26 no.1
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• pp.3-33
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• 2004

This paper investigates the effects of inflation on real estate prices, particularly the discrepancy between the sales and chonsei prices of housing, in an economy in which real interest rates are secularly declining due to the fall in capital productivity. When real interest rates fall, real estate prices rise relative to chonsei prices, and thus the well-known adverse effect of inflation, or the discrepancy between the value of financial assets (or chonsei principal) and the value of real assets (or real estate), is aggravated although the monetary authority maintains the same rate of inflation. This theoretical prediction can help explain the trend of the ratio of apartment sales prices to chonsei prices. That is, the stabilization of inflation relative to real interest rates appears to have contributed to the secular stabilization of this ratio in the 1990s, while the fall in real interest rates appears to have led to the rise of this ratio since 2001.

• Journal of Chest Surgery
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• v.33 no.2
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• pp.125-131
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• 2000

Background: Hyperinflation during lung ischemia has been known to improve pulmonary functions after reperfusion which may be exerted through a pulmonary vasodilation and avoidance of atelectasis by an increased surfactant release and been known whether the improvement of pulmonary function was the effect of hyperinflation itself or the oxygen content in inflation gas. Therefore we attempted to clarify the effect of hyperinflation with oxygen in pulmonary inflation gas during warm ischemia on pulmonary function after reperfusion to solve the problem of ischemia-reperfusion injury after lung transplantation. Material and Method: sixteen mongrel dogs were randomly divided into two groups: the left lung was inflated to 30-35 cm H2O with 100% oxygen in oxygen group and 100% nitrogen in nitrogen group. The inflated left lung was maintained with warm ischemia for 100 minutes. Arterial and mixed venous blood gas analysis and hemodynamics were measured before ischemia and 30, 60, 120, 180 and 240 minutes afer reperfusion. Lung biopsy was taken for the measurement of lung water content after the end of reperfusion. Result: In oxygen group arterial oxygen tension the difference of arterial and mixed venous oxygen tension and the difference of alveolar-arterial oxygen tension at 30-minute after reperfusion were not significantly different from those before ischemia and were stable during the 40hour reperfusion. However in nitrogen group these values were significantly deteriorated at 30-minute after reperfusion. there was no significant difference between two groups in hemodynamic data peak airway pressure and lung water content. Conclusion : The results indicated that the oxygenation one of the most important pulmonary functions was improved by pulmonary inflation with 100% oxygen during warm ischemia but the hemodynamics were not. Oxygen as a metabolic substrate during warm ischenia was believed to make the pulmonary tissues to maintain aerobic metabolism and to prevent ischemic damage of alveoli and pulmonary capillary.

• International Area Studies Review
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• v.12 no.3
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• pp.49-67
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• 2008

In this paper, we address the problem of optimal monetary policy rule in the presence of abrupt shifts in the structure of the economy. To do so, we first estimate a Markov switching model for the US housing price inflation, and find evidence supporting the presence of two distinct regimes for the US housing price inflation. One of the two regimes identified appears 'usual', in that housing price inflation negatively responds to higher real interest rate. The other regime is 'unusual', in that the housing price inflation is positively related with real interest rate. We then solve an optimal control problem of the FRB under the presence of the two regimes thus identified. The optimal policy is 'asymmetric' in that the optimal responses in the 'usual' regime require the FRB to lean against the wind to inflationary pressure, while the FRB is recommended to accommodate it in the unusual regime. It is also found that the optimal degree of responses is more conservative when the FRB acknowledges the uncertainty about future regime.

• International Area Studies Review
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• v.13 no.2
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• pp.66-88
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• 2009

This paper studies optimal discretionary monetary policy in the presence of uncertainty in the housing sector. In particular, we allow two possible regimes regarding the evolution of housing price inflation and the effects of housing price inflation on the aggregate demand. Estimation results with the US data confirm the presence of two distinctive regimes, one 'normal' and the other more akin to the housing price 'bubble' state. The optimal policy is 'asymmetric' in that the optimal responses in the 'normal' regime require the central bank to lean against the wind to inflationary pressure from CPI and housing inflation, while the central bank is recommended to accommodate it in the other regime.

• International Area Studies Review
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• v.21 no.4
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• pp.19-39
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• 2017

The purpose of this paper is to investigate the impact of terms of trade and its volatility on real GDP and inflation. I estimate the linear and dynamic panel model including variables such as real GDP, inflation, terms of trade, capital stock, employment and education. The sample countries consist of OECD 26 countries and panel data ranges from 1990 to 2015. The empirical results show that terms of trade and its volatility do not affect the real GDP significantly. Even if the terms of trade has a negative relationship with real GDP, the magnitude of the estimated coefficients was very small. This result seems to be related with the industry structure and domestic demand structure of the member countries. On the other hand, terms of trade and its volatility have the significant impact on inflation. When the terms of trade and its volatility increase, the inflation increases.

• Proceedings of the Korea Water Resources Association Conference
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• 2021.06a
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• pp.392-392
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• 2021

자료동화(data assimilation) 기법은 관측 자료와 예측 모형의 정보를 동시에 활용, 모형의 상태량(state variables)이나 매개변수(model parameters)를 실시간으로 업데이트하는 Bayesian 필터링 이론에 근거한 방법으로, 최근 이를 활용한 수문 모의 정확도 향상 기술이 빠르게 발전하고 있다. 본 연구에서는 앙상블 자료동화의 정확성을 향상시키기 위한 세부 방법인 along-the-stream localization과 inflation 기법의 분포형 수문 모형에 대한 적용성을 대규모 지역 단위(regional-scale) 모의를 통해 검토한다. 분포형 수문모형과 자료동화 framework로는 WRF-Hydro(Weather Research and Forecasting Model Hydrological Modeling System)와 DART(Data Assimilation Research Testbed)를 각각 적용한다. WRF-Hydro는 미국의 전 대륙지역(CONUS; continental United States)에 대한 수문 모델링 framework인 National Water Model의 핵심엔진이고, DART는 미국 National Center for Atmospheric Research(NCAR) 연구소에서 개발한 범용 자료동화 도구이다. 본 연구에서는 지표수 수문모형의 자료동화를 위해 개발된 기법인 along-the-stream localization과 inflation 기법이 하도 추적에 미치는 영향을 분석한다. along-the stream localization 기법은 공간적 근접도 외에 하도의 수문학적 연관관계를 고려하는 localization 기법으로, 상대적으로 수문학적 상관도가 떨어지는 하도에 대한 과도한 자료동화를 줄여줄 수 있다. inflation 기법은 앙상블의 다양성을 증가시키는 기법으로, 칼만 필터(Kalman filter)에 의한 업데이트의 이전이나 이후 적용하여 앙상블 예측의 정확도를 추가적으로 향상시킬 수 있다. 본 고에서는 앙상블 자료동화 기법을 지표수 수문 모의에 적용할 경우 남아 있는 난제와 적용 가능한 방법에 대해 중점적으로 논의한다.

• Journal of Labour Economics
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• v.37 no.2
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• pp.1-47
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• 2014

Longitudinal analysis of individual wage data received from the Korea Labor and Income Panel Survey (KLIPS) for the 1998-2012 period reveals that nominal wage reductions are prevailing among job stayers. It is also found that the probability of nominal wage cut is higher in the period of lower inflation or higher unemployment, and affected by various individual or group characteristics. Additional analysis of two establishment-based average wage series and the KLIPS shows that real wages are substantially procyclical, which is attributed to the strong procyclicality of nominal wages rather than countercyclicality of inflation. Current findings defy wage-rigidity-based explanations of unemployment fluctuations or models that predict wage rigidity, inlcluding segmented labor market hypotheses.