Introduction & History
The Korean Economic Association was launched in Pusan on November, 30, 1952.
KOREAN JOURNAL OF ECONOMIC STUDIES
Year 2024 / Vol 72 / No 4
This study quantitatively analyzes the intergenerational welfare impacts of policy alternatives with different cost-sharing structures to respond to the deteriorating health insurance financing caused by demographic changes due to low fertility and aging, using a heterogeneous agent overlapping generation general equilibrium model. The analysis shows that due to the rapidly rising nature of health care costs in the later stage of life, policies that increase out-of-pocket spending will cause significant harm to the welfare of the current older generation. In contrast, the policy scenario with additional taxation based on labor income results in a significant increase in welfare for the current generation and a significant decrease in welfare for future generations. This is because by the 2060s, when the additional fiscal burden increases dramatically due to the significant increase in the old-age dependency ratio, the current generation will have largely retired from the labor market, shifting most of the additional tax burden to future generations. For the policy scenario that uses consumption tax to address the additional tax burden, the change in intergenerational welfare is more uniform than for the other scenarios. This is because the life cycle of consumption, which is the tax base of consumption tax, remains flat over its entire life compared to the life cycle of labor supply.
Estimating the Taylor Rule using Sectoral Inflation
Year 2024 / Vol 72 / No 4
This paper estimates the central bank’s Taylor rule using data from the period after the adoption of the inflation targeting regime up to the most recent period. The key differences from existing studies are as follows: First, the analysis period is divided into three sub-periods to consider changes in the monetary policy operating framework. Second, the Taylor rule is estimated not only using CPI inflation, but also utilizing sectoral inflation rates. This allows us to examine the extent to which the central bank has been placing weights on sectoral inflation rates. The analysis results show that the central bank’s policy responses have varied depending on the monetary policy operating framework. In the early period, the central bank responded more actively to the output gap than the inflation gap. However, in the medium and later periods, the central bank paid closer attention to the inflation gap. The consideration of sectoral inflation also differed across the sub-periods. The results remained consistent across various robustness checks. Additionally, the analysis identified an asymmetry in the central bank’s policy responses when inflation pressures were positive versus negative. These findings are expected to contribute to a better understanding of the central bank’s monetary policy behavior.
Year 2024 / Vol 72 / No 4
This study analyzed the impact of a price ceiling system on apartment prices in Seoul and three Gyeonggi-do cities using the difference-in-differences method. The sample is divided into speculative and non-speculative areas to account for other policies and regional variations in the policy effect. Results showed that the policy reduced prices in speculative areas post-announcement, with no significant effect in non-speculative areas, confirming heterogeneous policy effects across areas. A dynamic analysis showed the policy's diminishing negative impact on housing prices over time. Additionally, deregulation of the policy increased prices, particularly in speculative areas, exacerbating price imbalances. These findings suggest that the price ceiling system may have unintended consequences, requiring careful implementation to meet policy goals.
KOREAN ECONOMIC REVIEW
Automation & the Future of Work: When Artificial Intelligence Meets Schumpeterian Innovators
Year 2025 / Vol 41 / No 1
Building on the task-based production models augmented with Schumpeterian innovation, we develop a theoretical framework to analyze the labor market impacts of the introduction of artificial intelligence (AI) to the R&D sector. Innovators allocate scientists’ time between automation of existing tasks and creation of new varieties of tasks to maximize their profits. The introduction of AI or general-purpose R&D technologies expands the frontier of the automation possibility set to encompass all existing tasks. In this milieu, task innovators prioritize the automation of the most profitable tasks – which depends on taskspecific wage, market size, capital productivity, and the innovator’s bargaining power. Therefore, unlike the previous waves of automation, new “AI” based automation technologies can pose a significant threat to high-skilled workers. Moreover, the advent of new R&D technologies raises the cost of creating new tasks and slows down the obsolescence of existing ones. Combined with faster task automation, ironically, the dynamics of the R&D sector may eventually decelerate widening income inequality among workers.
Multi-class Shares around the World: Role of Institutional Investors
Year 2025 / Vol 41 / No 1
This study examines multi-class share structures around the world. We use a comprehensive sample of publicly listed firms in 45 countries over the period 2001–2016 and find that institutional investors exhibit strong aversion toward multi-class firms, penalizing them through a valuation discount. The presence of institutional investors correlates with a higher likelihood of share-class unification. These effects are stronger for local (particularly in the US) and actively managed investors. Overall, our research highlights the role of institutional investors in the current debate on banning multi-class stocks from global stock indices.
Year 2025 / Vol 41 / No 1
In this study, we estimate the elasticity of the marginal utility of income using nationally representative household survey data from South Korea, following the direct measurement approach of Layard et al. (2008). Our findings suggest that the income elasticity of marginal utility for the broader population is 1.49 and remains stable over time. Moreover, we explore potential heterogeneity in the income elasticity of marginal utility among individuals. Statistically significant differences in this elasticity are observed across subgroups defined by various demographic and socioeconomic characteristics, including age, marital status, employment status, health status, educational attainment, and net asset positions.
KOREAN ECONOMIC FORUM
Estimation of Potential GDP in Korea Using the Stochastic Frontier Production Approach
Year 2024 / Vol 17 / No 3
This study uses a stochastic frontier production model to estimate Korea’s potential GDP. The model estimates time-varying technical inefficiency for each of the 38 industries from 1995 to 2022. After combining the minimum technical inefficiency of each industry with industry-level potential labor and capital, we calculate the industry-level potential GDP and aggregate them to obtain the economy-level potential GDP. The results suggest that actual GDP below potential GDP is primarily due to the industry’s inability to minimize technological inefficiency rather than suboptimal labor and capital inputs. In particular, since 2010, a decline in capital utilization and an increase in technical inefficiency have expanded the GDP gap, causing the actual growth rate to fall about 25% faster than the potential growth rate. The study distinguishes itself from previous research by reflecting changes in technical inefficiency at the industry level, thus capturing the structural characteristics of Korea’s export-driven industrial sector. It suggests that policies enhancing potential growth rates and reducing the recent GDP gap are needed to recover the midto long-term growth rate.
Effects of Labor Market Rigidity on Foreign Market Entry by Korean Manufacturing Firms
Year 2024 / Vol 17 / No 3
This study identifies the determinants of Korean firms’ decision on foreign market entry by focusing on the role of labor market rigidity using the Korean manufacturing sector data from 2007 to 2017. We use the data from HCCP survey by the KRIVET(Korea Research Institute for Vocational Education and Training). Empirical results show that the strength of labor union has significant effects on the probability of overseas expansion. The firm-specific analysis confirms that the impact of labor union is greater for labor-intensive firms. The regression analysis by investment destination reveals that overseas expansion towards Asian countries is largely affected by labor costs and the number of union members, but for expansion into North America is not affected by labor market rigidity. For the labor-management relations within company, the estimation results show that the more confrontational the labor-management relations, the higher the possibility of overseas expansion. Lastly, we find that overseas expansion increases in companies with decreasing demand for their main products or innovative companies that develop new products. All these results indicate that labor market rigidity affects firms’ decision on overseas expansion, and the government should consider these effects when designing reshoring policies.
Year 2024 / Vol 17 / No 3
1. 한국경제포럼 한국연구재단 학술지 계속평가 ‘등재학술지’ 본 학회 한국경제포럼은 지난 2016년 3월 25일 정관 개정을 통해 정식 편집위원회가 구성되었으며, 그동안 여러 편집위원님들과 회원님들의 기여에 힘입어 2021년도에 한국 연구재단 ‘등재학술지’로 선정되었습니다. 한국경제포럼은 이론적·계량적 모형을 통한 정책시사점 도출 뿐만 아니라, 한국경제에 대한 현실성 있는 정책방안을 제시하는 논문을 지향합니다. 우리 경제의 제반 문제들을 올바르게 이해하고, 그 해법을 모색하는 데 기여 할 수 있는 정책방안을 제시하는 논문을 지향합니다. 앞으로도 한국경제포럼을 독보적 인 한국경제 정책연구 학술지로 발전시켜 한국경제에 대한 정책시사점이 많은 영향력 있는 논문들을 게재할 수 있도록 회원님들의 많은 투고와 관심을 요청 드립니다. 한국경제포럼에 게재 된 모든 논문은 http://www.kea.ne.kr/publication/kef/article 에서 무료로 다운 받을 수 있습니다. 2. The Korean Economic Review (KER) 본 학회에서 발간하는 영문학술지인 KER은 한국연구재단 등재학술지이며, SSCI 및 Scopus 등재학술지입니다. 앞으로도 KER이 국제학술지로 더욱더 발전해 나갈 수 있도록 회원님들의 많은 관심과 KER에 게재 된 논문에 대한 많은 인용 및 투고를 부탁드립니다. KER에 게재 된 모든 논문은 http://www.kea.ne.kr/publication/ker/article 또는 http://www.kereview.or.kr/main/ 에서 무료로 다운 받을 수 있습니다. 3. KER RePEc (Research Papers in Economics) 사이트 업로드 KER 창간호부터 최근호까지 게재된 모든 논문들을 경제 논문 데이터베이스인 RePEc.org 에서 확인할 수 있습니다. KER 관련 사이트는 아래와 같습니다. 회원님들의 많은 인용 및 관심을 부탁드립니다. http://econpapers.repec.org/article/keakeappr/