IDEAS home Printed from https://ideas.repec.org/a/ris/jecdev/0090.html
   My bibliography  Save this article

Can Korea Protect Itself from International Capital Flows: Estimates of Monetary Sterilization

Author

Listed:
  • Koo, Seh-Beom

    (Institute for Global Economics, South Korea)

Abstract

The study investigates the external influences on Korea’s monetary policy over the period from 1990 to 2020. The focus is on the effects of US interest rates, payments imbalances and exchange rate changes on Korean monetary policy. The estimation of the Taylor rule measures the effects on Korean interest rates and the estimation of sterilization/ offset coefficients measures the effects on the domestic money supply and monetary base. This study measures the sterilization/offset equations and compares the results with the ones from Koo (2004) which examines the Taylor rule study. The empirical tests of both studies reveal two key findings: (1) Korean monetary policy has been influenced by monetary developments in the US, but it still has had a good deal of independence. (2) The exchange rate plays a crucial role for the BOK in achieving independent monetary policy.

Suggested Citation

  • Koo, Seh-Beom, 2024. "Can Korea Protect Itself from International Capital Flows: Estimates of Monetary Sterilization," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 49(2), pages 139-157, June.
    • Handle: RePEc:ris:jecdev:0090
    as

    Download full text from publisher

    File URL: https://jed.cau.ac.kr/archives/49-2/49-2-7.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Korean Monetary Policy; US Interest Rates; Sterilization and Offset Coefficients; Exchange Rate; Korean Interest Rate;
    All these keywords.

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • F30 - International Economics - - International Finance - - - General
    • G01 - Financial Economics - - General - - - Financial Crises

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:jecdev:0090. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tram Nguyen (email available below). General contact details of provider: https://edirc.repec.org/data/eccaukr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.