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학술연구/단체지원/교육 등 연구자 활동을 지속하도록 DBpia가 지원하고 있어요.
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연구자들이 자신의 연구와 전문성을 널리 알리고, 새로운 협력의 기회를 만들 수 있는 네트워킹 공간이에요.
초록· 키워드
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The korean economy has suffered from the stagnation of consumption and investment which has been major sources of the recent economic recession while export has been taking a fovorable turn. To recover the domestic demand such as consumption and investment expenditures, the low interest rates as the internal policy have been put in effect. On the otehr hand the won/dollar exchange rate has been kept from appreciating through the foreign exchange market intervetion in order to support the competitiveness of domestic goods. Nevertheless the effectiveness of the low interest rate policy on investment is still in doubt and also more export has been less linked to the increases in both consumption and investment expenditures.
This is because an exchange rate depreciation has two offsetting effects on investment. One is the positive effect that exchange rate depreciations would lead firms to expand investment through the profit channel because exchange rate depreciations could imply strong relative price changes which increase demands for export and import-competing goods. The other is the negative effect that exchange rate depreciations would lead firms to contract investment through income and cost channels. Moreover in small open economy the exchange rate volatility affects the investment decision of the firms, which direction depends on the attitude toward the firm's risk. If the finn is risk averse, more exchange rate volatility results in less investment, but if the firm is risk neutral, more exchange rate volatility results in more investment. Therefore, the net effects of the changes in real exchange rate and exchange rate volatility on the investment are ambiguous in the theoretical literature.
This paper examines the net effects of the changes in real exchange rate and exchange rate volatility on the investment in Korea whose economy has highly relied on imported raw materials and intermediate inputs as well as export. For this empirical study, the error correction model by Johansen is used.
The results of the study are as follows. First, income increases are likely to be associated with investment expansions as the theory predicts. Second the real interest rate shows the positive relation with investment. This important finding which is different from the theoretical prediction casts doubt on standard policy prescription that argue that the low interest rates are important instruments for stimulating the firms' investments. This finding might be supported by the recent experiences that the low interest rate policy has failed in investment expansion. Third result shows that real exchange rate depreciations would lead firms to contract investment expenditure. This result could arise if the income and cost effects of exchange rates on investment dominate the profit effect. The final result is that the exchange rate volatility also slightly decreases the investment.
These results imply that real exchange rate depreciations can be expected to incur increases in export in the short run while it can be a factor to discourage firm's investment mind and then the international competitiveness as well as the potential growth capability. Therefore the policy makers related to the exchange rate operation should take into due consideration that the exchange rate appreciation can leads to expand investment and consumption in the short run and the potential growth capability in the long run rather than costly passive policy to hold back the appreciation pressure through the foreign exchange market interventions.
Finally the authority's exchange rate operation should be directed toward minimizing the exchange rate volatility through the fine tunning rather than hindering the exchange rate appreciation against the market forces. The irreversibility of investment would discourage the foreign direct investment in the area with the high degree of uncertainty. So in order to induce the foreign direct investment, the government should operate the stable exchange rate policy.
This is because an exchange rate depreciation has two offsetting effects on investment. One is the positive effect that exchange rate depreciations would lead firms to expand investment through the profit channel because exchange rate depreciations could imply strong relative price changes which increase demands for export and import-competing goods. The other is the negative effect that exchange rate depreciations would lead firms to contract investment through income and cost channels. Moreover in small open economy the exchange rate volatility affects the investment decision of the firms, which direction depends on the attitude toward the firm's risk. If the finn is risk averse, more exchange rate volatility results in less investment, but if the firm is risk neutral, more exchange rate volatility results in more investment. Therefore, the net effects of the changes in real exchange rate and exchange rate volatility on the investment are ambiguous in the theoretical literature.
This paper examines the net effects of the changes in real exchange rate and exchange rate volatility on the investment in Korea whose economy has highly relied on imported raw materials and intermediate inputs as well as export. For this empirical study, the error correction model by Johansen is used.
The results of the study are as follows. First, income increases are likely to be associated with investment expansions as the theory predicts. Second the real interest rate shows the positive relation with investment. This important finding which is different from the theoretical prediction casts doubt on standard policy prescription that argue that the low interest rates are important instruments for stimulating the firms' investments. This finding might be supported by the recent experiences that the low interest rate policy has failed in investment expansion. Third result shows that real exchange rate depreciations would lead firms to contract investment expenditure. This result could arise if the income and cost effects of exchange rates on investment dominate the profit effect. The final result is that the exchange rate volatility also slightly decreases the investment.
These results imply that real exchange rate depreciations can be expected to incur increases in export in the short run while it can be a factor to discourage firm's investment mind and then the international competitiveness as well as the potential growth capability. Therefore the policy makers related to the exchange rate operation should take into due consideration that the exchange rate appreciation can leads to expand investment and consumption in the short run and the potential growth capability in the long run rather than costly passive policy to hold back the appreciation pressure through the foreign exchange market interventions.
Finally the authority's exchange rate operation should be directed toward minimizing the exchange rate volatility through the fine tunning rather than hindering the exchange rate appreciation against the market forces. The irreversibility of investment would discourage the foreign direct investment in the area with the high degree of uncertainty. So in order to induce the foreign direct investment, the government should operate the stable exchange rate policy.
목차
Abstract
Ⅰ. 서론
Ⅱ. 이론적 배경 및 기존의 실증연구
Ⅲ. 실증분석
Ⅳ. 결론
참고문헌
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UCI(KEPA) : I410-ECN-0101-2010-326-002836735