Price Pressure Gaps [electronic resource] : An Application of P* Using Korean Data / Richard D Haas.
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TextSeries: IMF Working Papers; Working Paper ; No. 91/26Publication details: Washington, D.C. : International Monetary Fund, 1991Description: 1 online resource (26 p.)ISBN: 1451981724 :ISSN: 1018-5941Subject(s): Cointegration | Equation | Money Demand | Time Series | Korea, Republic ofAdditional physical formats: Print Version:: Price Pressure Gaps : An Application of P* Using Korean DataOnline resources: IMF e-Library | IMF Book Store Abstract: This paper presents estimates of a price-pressure indicator for Korea. It does this by constructing measures of how much M2 velocity and output differ from their long-term values. This, in turn, involves estimating a demand for money function in an error correction framework in which interest rates in the unorganized money market help to account for the effects of ongoing financial liberalization. An equation explaining the Korean inflation rate is identified in which both the monetary variable--the velocity gap--and the real variable--the output gap--play important roles.
This paper presents estimates of a price-pressure indicator for Korea. It does this by constructing measures of how much M2 velocity and output differ from their long-term values. This, in turn, involves estimating a demand for money function in an error correction framework in which interest rates in the unorganized money market help to account for the effects of ongoing financial liberalization. An equation explaining the Korean inflation rate is identified in which both the monetary variable--the velocity gap--and the real variable--the output gap--play important roles.
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