A Study on the Short and Long Run Effects of Real Income and Real Exchange Rate on Korea-Japan Commodity Trading: Using Industry Data Classified by New Properties

Kim JoungGu

doi:10.18107/japs.2017.24.2.007

This study analyzed the effects of income and exchange rate on trade between Korea and Japan using trade data for the new properties during the first quarter of 2002 - the third quarter of 2016. In the empirical analysis model, the Structural Break of the time series data was applied to the structural unit root test. Then, the ARDL regression model including the structural breaks as the fixed regression variable and the variable regression variable between the two countries’ income and the real exchange rate was constructed and empirically analyzed. As a result of the structural unit root test, it is reasonable to treat it as a fixed regression variable because the structural break period is different for each variable and a bias occurs when it is treated as a dummy such as the global financial crisis. As a result of the ARDL Bounds test, the regression model of total import of raw materials(LIRMS), import of raw materials for fibber type(LIRMFI), imports of raw materials for chemical products(LIRMCH), total capital goods export(LOKGS), IT Product capital goods export(LOIKGIP), the null hypothesis of no relation was adopted, and the null hypothesis of no long – term cointegration was rejected for the rest of industries.

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