Energy Shocks and Macroeconomic Adjustment Policies for Korea

Seung-Rae Kim ()

Korean Economic Review, 1997, vol. 13, issue 2, 91-110

Abstract: The problems of external shocks are serious and pervasive in the developing countries with a hiph level of foreign dependence. When confronted with an exter-nal shock such as an energy crisis, countries may be forced into drastic adjustments of their economic policies, which create effects on both real and monetary components. This paper, using a hybrid econometric general equilibrium model for Korea, estimates economy-wide impacts of energy shocks and then evaluates the effects of adjustment policies for macroeconomic stabilization. The result calls for a cautious use of adjustment policies being implemented in response to energy shocks. This has important implications for the changing mix of the Korean economy towards a less energy-vulnerable economy.

Keywords: A Hybrid Econometric General Equilibrium Model; Energy Shocks; Macroeconomic adjustment Policies (search for similar items in EconPapers)
JEL-codes: C53 C68 E63 Q43 (search for similar items in EconPapers)
Date: 1997
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