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The effects of external shocks on the Korean economy: CGE model-based analysis

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  • Hyeok Lee

    (Yonsei University)

  • Yong Kyun Kim

    (Yonsei University)

Abstract

The trend of low commodity prices looks to continue. Such a trend will affect small open economies that are heavily commodity import dependent, such as the economy of South Korea. Hence, it is of interest to see how the economy would have performed differently with changes in the imported commodity price. In order to systematically investigate this effect, this paper utilizes the Computable General Equilibrium model. In applying the model, maximum entropy estimation approach is used to estimate behavioral parameters for the model. The results of scenario analyses seem to indicate that technology intensity of the industries dictates how differently the given industry will behave with regard to the change in crude oil prices.

Suggested Citation

  • Hyeok Lee & Yong Kyun Kim, 2018. "The effects of external shocks on the Korean economy: CGE model-based analysis," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 7(1), pages 1-14, December.
    • Handle: RePEc:spr:jecstr:v:7:y:2018:i:1:d:10.1186_s40008-018-0114-2
    DOI: 10.1186/s40008-018-0114-2
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    References listed on IDEAS

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    4. Go, Delfin S. & Lofgren, Hans & Ramos, Fabian Mendez & Robinson, Sherman, 2016. "Estimating parameters and structural change in CGE models using a Bayesian cross-entropy estimation approach," Economic Modelling, Elsevier, vol. 52(PB), pages 790-811.
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    Cited by:

    1. Obayelu, Abiodun & Ogunmola, Omotoso & Obayelu, Oluwakemi & Adeyemi, Oluwatosin, 2021. "Crude Oil Price Shocks and Food Production Output in Oil Producing and Exporting Countries: The Case Study of Nigeria," 2021 Conference, August 17-31, 2021, Virtual 315394, International Association of Agricultural Economists.

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