• 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.

• Journal of Labour Economics
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• v.43 no.3
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• pp.63-100
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• 2020

This paper incorporates the Diamond-Mortensen-Pissarides search and matching framework into the DSGE model. We estimate the model using a Bayesian estimation methodology on Korean data (1991:1-2020:1). Using the estimated model, we investigate the quantitative effects of wage subsidies. Wage subsidies increase matched firms' profits by reducing labor costs which leads to increases in new matches, employment and output. We find that for one percent of GDP in wage subsidies, the cumulative increase in the output level will be greater than 1 percent.