Structural change in the trend and cycle in Korea

Nam Gang Lee, Byoung Hoon Seok

Research output: Contribution to journalArticlepeer-review

Abstract

On the basis of regression of consumption on output, we develop a new approach to identify a structural break in business cycles. Using this approach, we find that a structural change in the trend and cycle in Korea occurred in 1993 and that the business cycles in Korea started to show the regularities of emerging market business cycles beginning in 1993. To explain these, we estimate the parameters of the productivity process in Korea, using data on Solow residuals. Our estimates show that the relative importance of trend growth shocks in the post-break period increased by a factor of 2.56 from that in the pre-break period.

Original languageEnglish
Pages (from-to)19-42
Number of pages24
JournalSeoul Journal of Economics
Issue number1
StatePublished - 2020

Keywords

  • Consumption volatility
  • Structural change
  • Trend growth shocks

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