A Quarterly Econometric Model of the Korean Economy
This paper presents a preliminary report of the KDI quarterly econometric model which is presently under extensive revision. The initial KDI quarterly model was developed in 1979 and has since been revised and reestimated annually. Since 1986, however, the Korean economy has undergone sweeping structural changes in various sectors. As an example, for the first time in Korean history, the balance of payments turned into surplus in 1986 and increased further to $14 billion in 1988. The financial sectors, as a natural consequence of these developments in the external trade sector, also had experienced both qualitative and quantitative shifts and changes as well. Along with these external developments, there has been a substantial restructuring in the Korean financial markets towards more liberalization and deregulations.
KeywordsConsumer Price Index Money Supply Real Interest Rate Private Consumption Consumption Expenditure
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