earticle

영어

We examine the effects of terms of trade and major macroeconomic variables on real GDP in Korea over the last four decades. We first briefly illustrate key features of terms of trade in Korea. Secondly, we identify the non-linear differential impacts of changes in terms of trade, real wages, real exchange rates, inflation rates and unemployment rate on real GDP, applying smooth transition regressions. Finally, we find that sharp rise of real wage above certain threshold may indicate a looming severe business cycle downturn in the Korean economy.