Money Demand and House Prices in Korea (in Korean)

Byoung Hark Yoo (harkyoo@bok.or.kr)
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Byoung Hark Yoo: Institute for Monetary and Economic Research, The Bank of Korea

Economic Analysis (Quarterly), 2007, vol. 13, issue 4, 39-63

Abstract: This paper proposes a new money demand function in a New Keynesian DSGE model where money demand depends not only on output and interest rates but also on house prices. The basic idea of the model is that money is demanded for transactions both of goods and of assets. The empirical results in this paper show that moves in house prices have considerably affected the variations in monetary aggregates in Korea since 1999. The results also imply that the recent increase in house prices was part of the reason why monetary growth did not decrease even though the Bank of Korea has increased its target interest rate several times since October 2005.

Keywords: Money Demand; House Prices; New Keynesian DSGE Model (search for similar items in EconPapers)
JEL-codes: E41 E51 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bok:journl:v:13:y:2007:i:4:p:39-63

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