Working paper/research report

Authors list: Kwak, Boreum; Seri, Chim; Tillmann, Peter

Publication year: 2024

URL: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4905220

Title of series: BOK Working Paper

Number in series: 2024-9

Abstract: 

We study the effect of time-varying disagreement among professional forecasters on the transmission of monetary policy in Korea, which has transitioned from an emerging to an advanced economy. We find that high levels of disagreement interfere with the transmission of monetary policy and, hence, weaken monetary policy effects. However, under low levels of disagreement, a monetary policy shock elicits textbook-like responses of inflation, expected inflation, and real activity. The findings are consistent with the view that disagreement affects the role of the signalling channel of monetary transmission relative to the conventional transmission channel. We also show that the dependence of the transmission on the level of disagreement remains intact even after controlling for time-varying monetary policy uncertainty and considering the shifts in the Bank of Korea’s inflation target type.

Harvard Citation style: Kwak, B., Seri, C. and Tillmann, P. (2024) Inflation Disagreement and Monetary Transmission in Korea. (BOK Working Paper, 2024-9). Seoul: Economic Research Institute, Bank of Korea. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4905220

APA Citation style: Kwak, B., Seri, C., & Tillmann, P. (2024). Inflation Disagreement and Monetary Transmission in Korea. (BOK Working Paper, 2024-9). Economic Research Institute, Bank of Korea. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4905220