Is Real Depreciation Contractionary? The Case of South Korea

Yu Hsing
Additional contact information
Yu Hsing: Southeastern Louisiana University

Economics Bulletin, 2016, vol. 36, issue 4, 1951-1958

Abstract: Applying the AD/AS model, this paper finds that real appreciation of the Korean won has a greater positive impact on aggregate output in South Korea during 2000.Q4 - 2008.Q3 than that during 2008.Q4 - 2016.Q1 and that more government deficit spending as a percent of GDP does not increase aggregate output. In addition, aggregate output has a positive relationship with change in productivity and the real oil price and a negative relationship with the real interest rate and the expected inflation rate. These results suggest that during or after the recent financial crisis, the positive impact of the real effective exchange rate on aggregate output has declined and that more government deficit as a percent of GDP would not lift up the economy.

Keywords: exchange rates; government deficits; interest rates; labor productivity; oil prices (search for similar items in EconPapers)
JEL-codes: E6 F3 (search for similar items in EconPapers)
Date: 2016-11-09
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.accessecon.com/Pubs/EB/2016/Volume36/EB-16-V36-I4-P190.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-16-00700

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().