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Title: |
Response of Domestic Production to
Depreciation in Korea: An Application of Johansen's Cointegration
Methodology |
| Author: |
Bahmani-Oskooee,
Mohsen; Rhee, Hyun-Jae |
| Author
Affiliation: |
U WI,
Milwaukee; Chong Ju U |
| Source: |
International Economic Journal, Winter 1997, v. 11, no. 4, pp. 103-112 |
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Publication Date: |
Winter 1997 |
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Abstract: |
Theoretical
and empirical studies concerned with the effects of devaluation on
domestic production have generally concluded that while in industrial
countries devaluation is expansionary, in developing nations it is
contractionary. In this paper we consider the experience of Korea alone.
After adopting a reduced form model from the literature we employed
Johansen's cointegration and error-correction technique and used
quarterly data over 1971-94 to show that in Korea real depreciation of
the Korean won is indeed expansionary. |
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