@article{ART002099819},
author={Youngcheul Ahn and Lee，Kab-Soo},
title={Application of Fisher's Equation on the Korea's Open Economy using System Dynamics},
journal={Journal of Asia-Pacific Studies},
issn={1225-8539},
year={2016},
volume={23},
number={1},
pages={5-30},
doi={10.18107/japs.2016.23.1.001}
TY - JOUR
AU - Youngcheul Ahn
AU - Lee，Kab-Soo
TI - Application of Fisher's Equation on the Korea's Open Economy using System Dynamics
JO - Journal of Asia-Pacific Studies
PY - 2016
VL - 23
IS - 1
PB - Institute of Global Affairs
SP - 5
EP - 30
SN - 1225-8539
AB - The goal of this paper is to find the optimal level of quantitative easing in order to overcome the economic crisis. This paper uses the system dynamics approach technically and the Fisher's equation of exchange theoretically for the diagnosis of the present Korea's economy. The simulation model is constructed through the non-linear simultaneous function for the long-term prediction. The first thing that has to be done is to find the trend functions of the determinants of the Fisher's equation, and then to construct the non-linear simultaneous function through the combination of the functions.
The results of simulation give some implications. The quantitative easing is divided into natural and political monetary easing. The political monetary easing is not necessary for the reflationary policy of real estate market, but important for the betterment of trade balance that can cause the industry growth.
The log-transformed variables are used for the simulation and statistic analysis. After calculating the optimal level of money expansion, the logarithmic values are converted into the real values.
Korea's economy is small in the whole international economy, but the effect of Korea's monetary policy on the trade balance isn't diminutive. Therefore, the Korea's monetary policy can lead the industry growth in the export-oriented economy and be an alternative to solve the financial crisis in the Korea's economy by improving the Korea's trade balance.
KW - Quantitative Easing;Fisher's Equation of Exchange;System Dynamics;Trade Balance;Mundell-Tobin Effect
DO - 10.18107/japs.2016.23.1.001
ER -
Youngcheul Ahn and Lee，Kab-Soo. (2016). Application of Fisher's Equation on the Korea's Open Economy using System Dynamics. Journal of Asia-Pacific Studies, 23(1), 5-30.
Youngcheul Ahn and Lee，Kab-Soo. 2016, "Application of Fisher's Equation on the Korea's Open Economy using System Dynamics", Journal of Asia-Pacific Studies, vol.23, no.1 pp.5-30. Available from: doi:10.18107/japs.2016.23.1.001
Youngcheul Ahn, Lee，Kab-Soo "Application of Fisher's Equation on the Korea's Open Economy using System Dynamics" Journal of Asia-Pacific Studies 23.1 pp.5-30 (2016) : 5.
Youngcheul Ahn, Lee，Kab-Soo. Application of Fisher's Equation on the Korea's Open Economy using System Dynamics. 2016; 23(1), 5-30. Available from: doi:10.18107/japs.2016.23.1.001
Youngcheul Ahn and Lee，Kab-Soo. "Application of Fisher's Equation on the Korea's Open Economy using System Dynamics" Journal of Asia-Pacific Studies 23, no.1 (2016) : 5-30.doi: 10.18107/japs.2016.23.1.001
Youngcheul Ahn; Lee，Kab-Soo. Application of Fisher's Equation on the Korea's Open Economy using System Dynamics. Journal of Asia-Pacific Studies, 23(1), 5-30. doi: 10.18107/japs.2016.23.1.001
Youngcheul Ahn; Lee，Kab-Soo. Application of Fisher's Equation on the Korea's Open Economy using System Dynamics. Journal of Asia-Pacific Studies. 2016; 23(1) 5-30. doi: 10.18107/japs.2016.23.1.001
Youngcheul Ahn, Lee，Kab-Soo. Application of Fisher's Equation on the Korea's Open Economy using System Dynamics. 2016; 23(1), 5-30. Available from: doi:10.18107/japs.2016.23.1.001
Youngcheul Ahn and Lee，Kab-Soo. "Application of Fisher's Equation on the Korea's Open Economy using System Dynamics" Journal of Asia-Pacific Studies 23, no.1 (2016) : 5-30.doi: 10.18107/japs.2016.23.1.001
