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Development of a Detection Model for the Companies Designated as Administrative Issue in KOSDAQ Market (KOSDAQ 시장의 관리종목 지정 탐지 모형 개발)

  • Shin, Dong-In;Kwahk, Kee-Young
    • Journal of Intelligence and Information Systems
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    • v.24 no.3
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    • pp.157-176
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    • 2018
  • The purpose of this research is to develop a detection model for companies designated as administrative issue in KOSDAQ market using financial data. Administration issue designates the companies with high potential for delisting, which gives them time to overcome the reasons for the delisting under certain restrictions of the Korean stock market. It acts as an alarm to inform investors and market participants of which companies are likely to be delisted and warns them to make safe investments. Despite this importance, there are relatively few studies on administration issues prediction model in comparison with the lots of studies on bankruptcy prediction model. Therefore, this study develops and verifies the detection model of the companies designated as administrative issue using financial data of KOSDAQ companies. In this study, logistic regression and decision tree are proposed as the data mining models for detecting administrative issues. According to the results of the analysis, the logistic regression model predicted the companies designated as administrative issue using three variables - ROE(Earnings before tax), Cash flows/Shareholder's equity, and Asset turnover ratio, and its overall accuracy was 86% for the validation dataset. The decision tree (Classification and Regression Trees, CART) model applied the classification rules using Cash flows/Total assets and ROA(Net income), and the overall accuracy reached 87%. Implications of the financial indictors selected in our logistic regression and decision tree models are as follows. First, ROE(Earnings before tax) in the logistic detection model shows the profit and loss of the business segment that will continue without including the revenue and expenses of the discontinued business. Therefore, the weakening of the variable means that the competitiveness of the core business is weakened. If a large part of the profits is generated from one-off profit, it is very likely that the deterioration of business management is further intensified. As the ROE of a KOSDAQ company decreases significantly, it is highly likely that the company can be delisted. Second, cash flows to shareholder's equity represents that the firm's ability to generate cash flow under the condition that the financial condition of the subsidiary company is excluded. In other words, the weakening of the management capacity of the parent company, excluding the subsidiary's competence, can be a main reason for the increase of the possibility of administrative issue designation. Third, low asset turnover ratio means that current assets and non-current assets are ineffectively used by corporation, or that asset investment by corporation is excessive. If the asset turnover ratio of a KOSDAQ-listed company decreases, it is necessary to examine in detail corporate activities from various perspectives such as weakening sales or increasing or decreasing inventories of company. Cash flow / total assets, a variable selected by the decision tree detection model, is a key indicator of the company's cash condition and its ability to generate cash from operating activities. Cash flow indicates whether a firm can perform its main activities(maintaining its operating ability, repaying debts, paying dividends and making new investments) without relying on external financial resources. Therefore, if the index of the variable is negative(-), it indicates the possibility that a company has serious problems in business activities. If the cash flow from operating activities of a specific company is smaller than the net profit, it means that the net profit has not been cashed, indicating that there is a serious problem in managing the trade receivables and inventory assets of the company. Therefore, it can be understood that as the cash flows / total assets decrease, the probability of administrative issue designation and the probability of delisting are increased. In summary, the logistic regression-based detection model in this study was found to be affected by the company's financial activities including ROE(Earnings before tax). However, decision tree-based detection model predicts the designation based on the cash flows of the company.

Incremental Ensemble Learning for The Combination of Multiple Models of Locally Weighted Regression Using Genetic Algorithm (유전 알고리즘을 이용한 국소가중회귀의 다중모델 결합을 위한 점진적 앙상블 학습)

  • Kim, Sang Hun;Chung, Byung Hee;Lee, Gun Ho
    • KIPS Transactions on Software and Data Engineering
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    • v.7 no.9
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    • pp.351-360
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    • 2018
  • The LWR (Locally Weighted Regression) model, which is traditionally a lazy learning model, is designed to obtain the solution of the prediction according to the input variable, the query point, and it is a kind of the regression equation in the short interval obtained as a result of the learning that gives a higher weight value closer to the query point. We study on an incremental ensemble learning approach for LWR, a form of lazy learning and memory-based learning. The proposed incremental ensemble learning method of LWR is to sequentially generate and integrate LWR models over time using a genetic algorithm to obtain a solution of a specific query point. The weaknesses of existing LWR models are that multiple LWR models can be generated based on the indicator function and data sample selection, and the quality of the predictions can also vary depending on this model. However, no research has been conducted to solve the problem of selection or combination of multiple LWR models. In this study, after generating the initial LWR model according to the indicator function and the sample data set, we iterate evolution learning process to obtain the proper indicator function and assess the LWR models applied to the other sample data sets to overcome the data set bias. We adopt Eager learning method to generate and store LWR model gradually when data is generated for all sections. In order to obtain a prediction solution at a specific point in time, an LWR model is generated based on newly generated data within a predetermined interval and then combined with existing LWR models in a section using a genetic algorithm. The proposed method shows better results than the method of selecting multiple LWR models using the simple average method. The results of this study are compared with the predicted results using multiple regression analysis by applying the real data such as the amount of traffic per hour in a specific area and hourly sales of a resting place of the highway, etc.

Makeup Cleansing Formulation with Lamellar Liquid Crystal Phase (라멜라 액정상 메이크업 클렌징 제형)

  • Yeo, Hye Lim;Lee, Ji Hyun;Kim, Su Ji;Noh, Minjoo;Jang, Ji Hui;Kim, Youn Joon;Yoon, Moung Seok;Yoo, Kweon Jong;Lee, Jun Bae
    • Journal of the Society of Cosmetic Scientists of Korea
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    • v.43 no.1
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    • pp.79-86
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    • 2017
  • This study is related to a lamellar liquid crystal make-up cleansing formulation with a hologram-like unique appearance between two polarizing plates. Make-up cleansing formulations with a lamellar liquid crystal phase have been extensively studied for a long time, but there have been limitations in practical commercialization because of increasing turbidity and viscosity. In this study, to solve this problem, alkyl chains of surfactants were modified to increase the fluidity of the liquid crystal phase, and electrostatic repulsion force was increased by introducing anionic surfactant. The lamellar liquid crystal make-up cleansing formulation which introduced anionic surfactants can easily inhibit crystallization through electrostatic repulsion force, thereby showing excellent stability overtime, maintaining transparent appearance and viscosity. In addition, we have newly introduced an in vitro cleansing evaluation method using fluorescent material and in vivo imaging system (IVIS) for objective and quantitative cleansing ability evaluation. The excellent cleansing ability of lamellar liquid crystal cleansing formulation has been confirmed by newly developed evaluation method. On the other hand, when lamellar liquid crystal make-up cleansing formulation was placed between orthogonally arranged two polarizing plates, a specific pattern like a hologram can be observed. This phenomenon is presumably interpreted as the interference between the visible light passing through the liquid crystal formulation and the lamellar structure. The lamellar structure of cleansing formulation was confirmed by SAXS analysis, exhibiting Bragg spacing ratio of 1 : 2. The lamellar liquid crystal make-up cleansing formulation prepared in this study would be useful for future application in make-up cleansing due to its excellent stability, cleansing ability, and unique hologram-like pattern placed between two polarizing plates.

An Exploratory Study on Fashion Retail Borrowing in Korea (대우한국시상령수차대적연구(对于韩国时尚零售借贷的研究))

  • Lee, Mi-Young;Kim, K.P. Johnson
    • Journal of Global Scholars of Marketing Science
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    • v.20 no.1
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    • pp.70-79
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    • 2010
  • There has been some research conducted that addressed immoral consumer behaviors in Korea; however, most of this research focused on purchasing counterfeits or shoplifting. High return rates of apparel and used apparel returns have been acknowledged as problem areas within the fashion industry. However, very few researchers have addressed this issue. Therefore, the goal of this research was to explore consumer's retail borrowing experience using a mixed methods approach. In study 1 Korean consumer's retail borrowing experiences was explored through focus group interviews. Findings informed study 2 an examination of apparel consumers' attitudes toward retail borrowing behavior via an online survey. Findings assist both researchers' and practitioners' understanding of retail borrowing behaviors and provide insight into retail borrowing issues in the apparel retail industry. For study 1, five focus-group interviews were conducted with seven panels of individuals that had retail borrowing experience within the past year. Thirty-five Korean consumers who lived in a metropolitan area participated in the focus group interviews. Most of consumers were in their 20's (n=21) and were women (n=24). Most participants purchased apparel items from a retail store and returned the worn items for either a full refund or exchanged the worn item for another item. Motives underlying retail borrowing behavior included social needs, job-related needs, fashion needs, and "smart shopping." Similar to existing research findings from other countries, social needs were the most frequently mentioned cause of retail borrowing in fashion stores. Consumers' moral values, attitude toward large corporations, and prior retail borrowing experience were mentioned as possible factors affecting consumers' retail borrowing behavior. For study 2, the questionnaire used to gather the data was developed based on the findings of part I and existing research. Questions concerning consumers' moral beliefs, sensation seeking tendencies, self-worth, past retail job experience, retail borrowing experience, and some demographic characteristics were included in the questionnaire. The data were collected via an online survey using an online panel provided by a commercial online research company located in Seoul, Korea. In order to obtain various consumers, a quota sample was (male: female=1:1, 20's:30's:40's=1:1:1, retail experience: no retail experience=1:3) obtained from the company. A total of 401 consumers who had shopped for apparel items during the prior 6 months participated in the online survey. The results indicated that 19.7% of the respondents reported they had experience borrowing fashion merchandise. Among these individuals, male borrowers (57%) outnumbered female borrowers. In terms of age distribution, x2 revealed that there was a statistical difference between respondents with and without retail borrowing experiences: 41.8% of the respondents with retail borrowing experience were in their 40's, while respondents without retail borrowing experience were evenly distributed between their 20's to 40's. There was also a significant difference between respondents with and without retail borrowing experience in terms of income: respondents with retail borrowing experience tended to have higher incomes than those without retail borrowing experience. T-tests were performed to compare respondents' fashion shopping behavior, moral beliefs, sensation-seeking tendencies, and attitudes toward retail borrowing behavior between participants with and without retail borrowing experience. As compared to those with no borrowing experience, respondents with experience tended to shop for fashion items more frequently and spent more on shopping for fashion items. Consumers with experience borrowing tended to have higher sensation-seeking tendencies than consumers without retail borrowing experience. A regression analysis revealed that attitudes toward fashion retail borrowing were negatively related to consumers' moral beliefs, but positively related to monthly fashion shopping frequency, sensation-seeking tendencies, and past fashion retail borrowing experience. Among these variables, past retail borrowing experience was the most significant predictor, followed by moral beliefs. This research serves as an initial attempt to address the motives that underlie retail borrowing behaviors and the factors affecting those behaviors. The findings of this study may facilitate an understanding of the consumer's retail borrowing, which will provide a basis for approaches that may help decrease retail borrowing and inappropriate returns at fashion retail stores. The findings may also provide materials for consumer education over the long term. In order to better understand fashion retail borrowing behavior, more research is needed in the future.

The Effects of Clinical Application of a Nursing Diagnosis Protocol (간호진단 프로토콜(Protocol)의 임상적용 효과에 관한 연구)

  • 이향련;조미영;조결자;김윤희;김귀분;김광주;문희자;박신애;강현숙
    • Journal of Korean Academy of Nursing
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    • v.19 no.1
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    • pp.40-62
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    • 1989
  • This study was conducted to measure the effects of clinical application of a Nursing Diagnosis Protocol. The dependent variables were the degree of patient's satisfaction and the degree of nurse's satisfaction with the nursing activity. Analysis of the effect of the use of the nursing diagnosis protocol was based on the nursing record. The subjects for this study were 61 nurses(experimental group 31, control group 30) and 155 patients (experimental group 55, control group 100) on four internal medicine wards in K University Hospital in Seoul. Data collection was done from August to October 12,1988. The results obtained in this study can be summarized as follows, 1, Effect of the clinical application of the nursing diagnosis protocol. 1) The first hypothesis ; “nurses who use the nursing diagnosis protocol will have higher degrees of satisfaction than those who use traditional methods” was rejected (t=.54, df=58, p=.59). 2) The second hypothesis ; “patients nursed by nurses using the nursing diagnosis protocol will have higher degrees of satisfaction than those nursed with traditional methods” was supported(t=1.93, df=154, p=.05). 3) The third hypothisis : Major hypothesis ; “the nursing records of the experimental group, who used the nursing diagnosis protocol, will be more detailed than those of the control group” was supported (t=6.40, df=79.90, p=.000). (1) The first subhypothesis ; “The recorded data collection of the experimental group will be more detailed than that of the control group” was rejected (t=1.79, df=118, p=.07). (2) The second subhypothesis ; “The recorded patient's problem statement of the experimental group will be more detailed than that of the control group”, was supported. (3) The third subhypothesis ; “The nursing record of the experimental group will be more convenient for implementation than that of the control group” was supported. 2. Factors related to the nurse's degree of satisfaction with protocol. 1) No general characteristics(age, religion, education level, duty career, present duty career) were related to the nurse's degree of satisfaction. 2) Variables related to the nurse's degree of satisfaction were “satisfaction as a nurse” and “consider nursing as lifelong job” (t=-2.6, df=13.22, p=.02, t=2.41, df=23.85, p=.02). 3. Factors related to the patient's degree of satisfaction. 1) General characteristics related to the patient's degree of satisfaction with nurses using the protocol were age, educational level, and being married.(F=5.17, df=3/153, p=.00, t= -2.39, df=154, p=,01, f=5.91, df=2/153, p=.00) 2) The variables previous hospitalization, duration of hospitalization, the hospital unit presence of a relative, medical insurance, or medical diagnosis were not related to the patient's degree of satisfaction. 1. The experimental group's nursing record was more detailed than the control group's record with regard to the physical and psychological state of the patients. As noted above, the experimental group nurses, who use a nursing diagnosis had protocol were less satisfied than the control group who used traditional methods of the recording, but experimental group patients had a higher degree of satisfaction than the control group patients. The nursing records of experimental group, using the nursing, diagnosis protocol was more detailed than that of the control group. If the nursing diagnosis protocol is used in clinical nursing practice, the quality of nursing care may be improved.

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Assessment of Breast Cancer Knowledge among Health Workers in Bangui, Central African Republic: a Cross-sectional study

  • Balekouzou, Augustin;Yin, Ping;Pamatika, Christian Maucler;Nambei, Sylvain Wilfrid;Djeintote, Marceline;Doromandji, Eric;Gouaye, Andre Richard;Yamba, Pascal Gastien;Guessy, Elysee Ephraim;Ba-Mpoutou, Bertrand;Mandjiza, Dieubeni Rawago;Shu, Chang;Yin, Minghui;Fu, Zhen;Qing, Tingting;Yan, Mingming;Mella, Grace;Koffi, Boniface
    • Asian Pacific Journal of Cancer Prevention
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    • v.17 no.8
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    • pp.3769-3776
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    • 2016
  • Background: Breast cancer is the leading cause of cancer deaths among women worldwide. High breast cancer mortality has been attributed to lack of public awareness of the disease. Little is known about the level of knowledge of breast cancer in Central African Republic. This study aimed to investigate the knowledge of health professionals on breast cancer. Materials and Methods: This cross-sectional study was conducted among 158 health professionals (27 medical; 131 paramedical) in 17 hospitals in Bangui using a self-administered questionnaire. Descriptive statistical analysis, Person's ${\chi}^2$ test and ANOVA were applied to examine associations between variables with p < 0.05 being considered significant. Results: Data analyzed using SPSS version 20 indicates that average knowledge about breast cancer perception of the entire population was 47.6%, diagnosis method 45.5%, treatment 34.3% and risk factors 23.8%. Most respondents (65.8%) agreed that breast cancer is important in Central African Republic and that family history is a risk factor (44.3%). Clinical assessments and mammography were considered most suitable diagnostic methods, and surgery as the best treatment. The knowledge level was significantly higher among medical than paramedical staff with regard to risk factors, diagnosis and treatment. However the trainee group had very high significant differences of knowledge compared with all other groups. Conclusions: There is a very urgent need to update the various training programs for these professionals, with recommendations of retraining. Health authorities must create suitable structures for the overall management of cancer observed as a serious public health problem.

Analysis of Integrated Oceanic Current Maps in Science and Earth Science Textbooks of Secondary School Based on 2015 Revised Curriculum (2015 개정 교육과정 기반 중등학교 과학 및 지구과학 교과서의 통합 해류도 분석)

  • Park, Kyung-Ae;Lee, Jae Yon;Park, Jae-Jin;Lee, Eunil;Byun, Do-Seong;Kang, Boon-Soon;Jeong, Kwang-Yeong
    • Journal of the Korean earth science society
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    • v.41 no.3
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    • pp.248-260
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    • 2020
  • Oceanic current maps introduced in science and earth science textbooks can offer a valuable opportunity for students to learn about rapid climate change and the role of currents associated with the global energy balance problem. Previously developed oceanic current maps in middle and high school textbooks under the 2007 and 2009-revised national curriculum contained various errors in terms of scientific accuracy. To resolve these problems, marine experts have constructed a unified oceanographic map of the oceans surrounding the Korean Peninsula. Since 2010, this process has involved a continuous, long-term consultation procedure. By extensively gathering opinions and through verification process, a representative and scientific oceanic current map was eventually constructed. Based on this, the educational oceanic current maps, targeting the comprehension of middle and high school students, were developed. These maps were incorporated into middle and high school textbooks in accordance with the revised 2015 curriculum. In this study, we analyzed the oceanic current maps of five middle school science textbooks and six earth science textbooks that were published in high school in 2019. Although all the oceanic current maps in the textbooks were unified based on the proposed scientific oceanic current maps, there were problems such as the omission of certain oceanic currents or the use of a combination of dotted and solid lines. Moreover, several textbooks were found to be using incorrect names for oceanic currents. This study suggests that oceanic current maps, produced by integrating scientific knowledge, should be visually accurate and utilized appropriately to avoid students' misconception.

In Vitro Evaluation of Shear Bond Strengths of Zirconia Cerami with Various Types of Cement after Thermocycling on Bovine Dentin Surface (지르코니아 표면 처리와 시멘트 종류에 따른 치면과의 전단 결합 강도 비교 연구)

  • Cho, Soo-Hyun;Cho, In-Ho;Lee, Jong-Hyuk;Nam, Ki-Young;Kim, Jong-Bae;Hwang, Sang-Hee
    • Journal of Dental Rehabilitation and Applied Science
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    • v.23 no.3
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    • pp.249-257
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    • 2007
  • State of problem : The use of zirconium oxide all-ceramic material provides several advantages, including a high flexural strength(>1000MPa) and desirable optical properties, such as shading adaptation to the basic shades and a reduction in the layer thickness. Along with the strength of the materials, the cementation technique is also important to the clinical success of a restoration. Nevertheless, little information is available on the effect of different surface treatments on the bonding of zirconium high-crystalline ceramics and resin luting agents. Purpose : The aim of this study was to test the effects of surface treatments of zirconium on shear bond strengths between bovine teeth and a zirconia ceramic and evaluate differences among cements Material and methods : 54 sound bovine teeth extracted within a 1 months, were used. They were frozen in distilled water. These were rinsed by tap water to confirm that no granulation tissues have left. These were kept refrigerated at $4^{\circ}C$ until tested. Each tooth was placed horizontally at a plastic cylinder (diameter 20mm), and embedded in epoxy resin. Teeth were sectioned with diamond burs to expose dentin and grinded with #600 silicon carbide paper. To make sure there was no enamel left, each was observed under an optical microscope. 54 prefabricated zirconium oxide ceramic copings(Lava, 3M ESPE, USA) were assigned into 3 groups ; control, airborne-abraded with $110{\mu}m$ $Al_2O_3$ and scratched with diamond burs at 4 directions. They were cemented with a seating force of 10 ㎏ per tooth, using resin luting cement(Panavia $F^{(R)}$), resin cement(Superbond $C&B^{(R)}$), and resin modified GI cement(Rely X $Luting^{(R)}$). Those were thermocycled at $5^{\circ}C$ and $55^{\circ}C$ for 5000 cycles with a 30 second dwell time, and then shear bond strength was determined in a universal test machine(Model 4200, Instron Co., Canton, USA). The crosshead speed was 1 mm/min. The result was analyzed with one-way analysis of variance(ANOVA) and the Tukey test at a significance level of P<0.05. Results : Superbond $C&B^{(R)}$ at scratching with diamond burs showed the highest shear bond strength than others (p<.05). For Panavia $F^{(R)}$, groups of scratching and sandblasting showed significantly higher shear bond strength than control group(p<.05). For Rely X $Luting^{(R)}$, only between scratching & control group, significantly different shear bond strength was observed(p<.05). Conclusion : Within the limitation of this study, Superbond $C&B^{(R)}$ showed clinically acceptable shear bond between bovine teeth & zirconia ceramics regardless of surface treatments. For the surface treatment, scratching increased shear bond strength. Increase of shear bond strength by sandblasting with $110{\mu}m$ $Al_2O_3$ was not statistically different.

A Study and Investigation for the Attitude about Smoking of Boys' and Girls' High School in Seoul (서울시내 남녀고교생의 흡연에 관한 태도 조사연구)

  • Sim Young Ae
    • Journal of Korean Public Health Nursing
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    • v.3 no.1
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    • pp.74-100
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    • 1989
  • Inspite of the lots of studies on the harmfulness of cigarette smoking to the body published by many researchers since 1950, cigarette smoking people are increasing in number especially, cigarette smoking by young and women causes a serious problem. Examining the physiological motives of youth shows that, impulse which the youth want to immitate the adults, alluring curiousity, and defiant physiology of escaping from the norm of traditional groups which has been banned are cooperated well compoundly. As the period of the youth is the one which they accumulate knowledge and charactor by learning as well as the period of growth mentally, and physically they should be rightly educated about smoking before they addicted to smoking and it is desirable for us to make the youth to understand how harmfully the smoking is to effect to their growth and mental soundness simply not as a social norm which they should not smoke. The main motive of this study on the attitude of smoking by the youth is to give basic materials related on this field. For this study, 647 questionnaires were used as studying material which were able to analyze among 720 questionnaires of 2 classes of each grade of 3 high schools among the high schools of boys, girls and co-educated in Seoul from Oct. 21, 1988 through Oct. 26, 1988. Study Instrument are graded in Likert's 5 point from 40 questions which are 20 questions m affirmations and 20 questions in negations after analyzing the factors on 60 simple sentence questions which the students showed in preliminary studies. And these are systemized to be measured from 1 point which means they think smoking IS very bad to 5points which means they think smoking is really good. In these collected materials, technical statistics of frequency. percentage, average, standard deviation are used for general character and smoking attitude, $X^2-test$ for examinning Independant variables of physical. emotional, ethical and other areas pearson's coefficient of correlation for related direction and degree" and step­regression analysis for the degree of relative contribution of all variables which effect smoking attitude. The results of this study are as follows; 1. The smoking attitude of high school boys and girls showed average of 1.78 in physical area, 2.63 in emotional area, 2.61 in ethical area, 2.29 in other area respectively in a negative attitude generally also the negative attitude are expressed most strongly in physical area. I've can also say by this results that smoking is harmful to their health and further more it can be judged that this proves the youth in the period of preparation be adults have a strong curiousity in the emotional, ethical and other areas. 2. The most influential variables in each field as related factors effecting smoking attitude of the student can be explained from 13.2 in physical area the lowest experienced variables to 25.2 in emotional area the highest of degree of smoking experience. The fact that the more the smoking experienced students are increasing in number the higher tendency which accept the' smoking tells as the importance of health education about the population of latest student's smoking as important variables shown equally in each area. Those of grade, age, numbers of smoking people in house are showed meaningful in pure interrelation. Those related to the acceptance of teacher's smoking, sex, mothors education are shown meaningful in opposite interrelations. This means that the' increasing number' of smoking people in grade age, the number of smoker in family have a affirmative attitude. And people who are not interested in teacher's smoking wants to quit it, and whose mother's education is higher have a negative attitude. 3. The most negatively answered questions of the smoking attitude In physical, emotional, ethical and other areas are as belows; Firstly too much smoking is harmful to our health is 1.12 point. Secondly smoking have a ill-effect on pregnancy and embryo is 1.13 point. Thirdly smoking is harmful· to our health is 1.27 point. Fourthly smoking in crowed area with the people such as In a bus or subway should be prohibited is 1.27point. Fifthly smoking can ruin lungs is 1.31 point. And the most affirmatively answered questions are also as below; Firstly we showed smoke depending on time and place is 3.96 points. Secondly smoking is just habit is 3.83 points. Thirdly smoking people seem to be unable and deplorable is 3.69 point. Fourthly smoking should be prohibited by law is 3.56 points. Fifthly high school student's smoking is immitation of adults is 3.52 points.

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Korea's Optimal Basket Exchange Rate : Thoughts on the Proper Operation of the Market Average Rate Regime (우리나라의 적정(適正)바스켓환율(換率) : 시장평균환율제도(市場平均換率制度)의 운용기준(運用基準) 모색(模索))

  • Oum, Bong-sung
    • KDI Journal of Economic Policy
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    • v.12 no.1
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    • pp.111-125
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    • 1990
  • For the last several years, considerable criticism has been leveled against Korea's exchange rate management. While Korea was designated a currency manipulator by the U.S., domestically it is often complained that the won/dollar rate did not adequately reflect changes in Korea's export competitiveness and fluctuations in the exchange rates of major currencies. In view of this situation, Korea changed its exchange regime at the beginning of March this year from the dual currency basket system to a more flexible one, called a "market average rate regime". Under this new regime, the won rate is determined in the exchange market based upon the supply of and demand for foreign exchange and is allowed to freely fluctuate each day within a + 0.4 % range. This paper, first, seeks to evaluate Korea's exchange rate management under the dual basket regime of the 1980s, and then to construct an optimal currency basket for the won which could provide a proper indicator for exchange market intervention under the new market average rate regime. The analysis of fluctuations in the real effective exchange rate (REER) of the won indicates that the won rates in the 1980s failed not only to offset changes in relative prices between home and trading partner countries, but also to properly respond to variations in major exchange rates as further evidenced by sizable fluctuations in the nominal effective rates of the won. In other words, the currency basket regime which was adopted in 1980 for the stabilization of the REER of the won has not been operated properly, mainly because authorities often resorted to policy considerations in determining the won's rate. In the second part of the paper, an optimal currency basket for Korea is constructed, designed to minimize the fluctuations in the REER of the won without including policy considerations as a factor. It is recognized, however, that both domestic and foreign price data are not available immediately for the calculation of the REER. For this problem, the approach suggested by Lipschitz (1980) is followed, in which optimal weights for currencies in the basket are determined based upon the past correlation between price and exchange rates. When the optimal basket is applied to Korea since the mid-80s, it is found that the REER of the won could have been much more stable than it actually was. We also argue for the use of variable weights rather than fixed ones, which would be determined by the changing relationship between exchange rates and relative prices. The optimal basket, and the optimal basket exchange rate based on that basket, could provide an important medium- or long-term reference for proper exchange market intervention under the market average rate regime, together with other factors, such as developments in the current account balance and changes in productivity.

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