A neoclassical analysis of the Korean crisis

Research output: Contribution to journalArticle

16 Citations (Scopus)

Abstract

In late 1997, Korea experienced a huge and unusual economic crisis. The three main features of this crisis are the sudden recession, the rapid recovery and a consumption drop as large as the output drop. A large body of literature qualitatively explains the Korean crisis in terms of financial and monetary variables such as exchange rates and interest rates. This paper complements these studies by quantitatively analyzing fluctuations in real macroeconomic variables such as real GDP and consumption. A stochastic small open economy neoclassical model can quantitatively account for the Korean crisis taking TFP and real interest rates as exogenous.

Original languageEnglish
Pages (from-to)449-471
Number of pages23
JournalReview of Economic Dynamics
Volume11
Issue number2
DOIs
Publication statusPublished - 2008 Apr 1
Externally publishedYes

Keywords

  • Financial crisis
  • Korean crisis
  • Small open economy
  • TFP

ASJC Scopus subject areas

  • Economics and Econometrics

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