The Korean Journal of Applied Statistics (응용통계연구)

The Korean Statistical Society (한국통계학회)
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Introduction of Chain-Weighted Method and GDP Fluctuations

  • Lee, In Gyu (Economic Statistics Department, The Bank of Korea) ;
  • Park, Chun Il (Department of Economics, Yonsei University)
  • Received : 2012.09.06
  • Accepted : 2012.10.22
  • Published : 2012.12.31
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Abstract

The Bank of Korea changed its method of GDP estimation from a fixed-weighted to a chain-weighted measure in 2009. The fixed-weighted method had had problems such as substitution bias and the rewriting of economic history. As a result of the change, annual growth rates calculated using the chain-weighted method from 1970 through 2008 turned out to be 0.8%p higher on average than the existing rates. The quarterly average chain-weighted growth rates were 0.19%p higher than the fixed-weighted ones, but they changed in the same directions. In this paper we analyze whether the differences in rates between the two calculation methods would bring about a difference in the cyclical characteristics of GDP. We conclude that although there were differences in growth rates after introduction of the chain-weighted method, there was no difference in the cyclical fluctuation.

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References

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