• Environmental and Resource Economics Review
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• v.19 no.2
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• pp.215-242
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• 2010

This study constructs a bayesian neoclassical DSGE model that applies oil usage. The model includes technology shocks, oil price shocks, and shocks to energy policies as exogenous driving forces. First, this study aims to analyze the roles of these exogenous shocks in the Korean business cycle. Second, this study examines the effects of long-term changes in the energy consumption structure, including the reduction in oil use as a share of energy consumption and improvement in oil efficiency. In the case of oil price shocks, results show that these shocks exert recessionary pressure on the economy in line with those obtained in the previous literature. On the other hand, shocks to energy policies, which reduce oil consumption per capital, result in opposite consequences to oil price shocks, decreasing oil consumption. Also, counterfactual exercises show that long-term changes in the energy consumption structure would mitigate the contractionary effects of oil price shocks.

• Environmental and Resource Economics Review
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• v.31 no.3
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• pp.367-391
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• 2022

We develop an energy-economy Bayesian DSGE model with the two sectors of electricity generations-traditional (fossil, nuclear) and renewable energy. Under imperfect substitutability between the two sectors, a technological shock on renewable energy sectors does not sufficient to facilitate energy conversion and reduce greenhouse gas emissions. Technology innovation on greenhouse gas emission reduction is also required. More importantly, sufficient investment should be derived by a well-functioning electricity market where electricity price plays a signal role in efficient allocation of resources. Indeed, market rigidities cause reduced consumption.

• KDI Journal of Economic Policy
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• v.34 no.4
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• pp.69-90
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• 2012

This paper explores the effect of the countercyclical capital buffer using a DSGE (Dynamic Stochastic General Equilibrium) model with a banking sector. The main results are following. First, if the CAR (capital asset ratio) rises by 1%p as the countercyclical capital buffer, output and credit would increase less than otherwise by 0.8%p and 1.2%p, respectively. Second, the countercyclical capital buffer would decrease both credit and debt of banks, or deposit, and, as a result, boost the CAR. However, if we are going to use monetary policy to control credit expansion by allowing the interest rate to respond to credit, bank capital would also diminish, which would cause the CAR to be lower.