Adjustment Cost on Investment and Under-Utilization of Maximum Installed Capacity in South Korean Business Cycle - A Bayesian New Keynensian Model
This study examines the effects of adjustment costs on investment and the under-utilization of maximum installed capacity within the South Korea using a New Keynesian business cycle with Bayesian approach. The New Keynesian business cycle model that incorporates both investment frictions as well as...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Sciendo
2025-03-01
|
| Series: | ECONOMICS |
| Subjects: | |
| Online Access: | https://doi.org/10.2478/eoik-2025-0026 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| Summary: | This study examines the effects of adjustment costs on investment and the under-utilization of maximum installed capacity within the South Korea using a New Keynesian business cycle with Bayesian approach. The New Keynesian business cycle model that incorporates both investment frictions as well as capital under-utilization. The model has been calibrated specifically for South Korea economy. The model estimation uses Markov Chain Monte Carlo (MCMC) methods along with the Metropolis-Hastings algorithm to draw samples from the posterior distributions parameters of the model. |
|---|---|
| ISSN: | 2303-5013 |