Skip to main content

Does productivity growth lower inflation in Korea?

Buy Article:

$51.63 plus tax (Refund Policy)

Abstract:

We investigate Granger causality between productivity growth and inflation in Korea using quarterly data for the period 1985Q1–2002Q4. Our results indicate unidirectional Granger causality from productivity growth to inflation. In light of such causality, we estimate the effect of productivity and other variables on productivity. According to our regression results, a 1% increase in labour and Total Factor Productivity (TFP) reduces Consumer Price Index (CPI) inflation by 0.07–0.08% and 0.37–0.44%, respectively. Our results also suggest that the productivity-inflation nexus became stronger in Korea since the Asian financial crisis, and that this was largely due to structural reform and technological progress.

Keywords: C32; E32; Granger causality; Korea; New Economy; O47; inflation; productivity

Document Type: Research Article

DOI: http://dx.doi.org/10.1080/00036846.2012.657352

Affiliations: 1: Department of International Trade,Honam University, Gwangju 506-714, Korea 2: Macroeconomic Studies Team,Bank of Korea, 3-110 Namdaemun-ro, Jung-guSeoul 100-794, Korea 3: Economics and Research Department,Asian Development Bank, 6 ADB AvenueMandaluyong City,Metro Manila, 1550 Philippines

Publication date: June 1, 2013

More about this publication?
routledg/raef/2013/00000045/00000016/art00004
dcterms_title,dcterms_description,pub_keyword
6
5
20
40
5

Access Key

Free Content
Free content
New Content
New content
Open Access Content
Open access content
Subscribed Content
Subscribed content
Free Trial Content
Free trial content
Cookie Policy
X
Cookie Policy
ingentaconnect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more