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Article

Navigating Uncharted Waters: The Transformation of the Bank of Korea’s Monetary Policy in Response to Global Economic Uncertainty

1
Department of Chinese Trade and Commerce, Sejong University, Seoul 05006, Republic of Korea
2
College of Business Administration, Henan Finance University, Zhengzhou 451464, China
*
Author to whom correspondence should be addressed.
Mathematics 2024, 12(11), 1657; https://doi.org/10.3390/math12111657
Submission received: 17 April 2024 / Revised: 14 May 2024 / Accepted: 23 May 2024 / Published: 25 May 2024

Abstract

The evolving global economic landscape necessitates adaptive monetary policies, especially for economies like South Korea that are deeply integrated with global markets. This research explores the strategic recalibrations of the Bank of Korea’s monetary policy amid fluctuations in global economic uncertainty. Utilizing a sophisticated microeconomic theoretical framework, this study employs Bayesian estimation techniques and impulse response analysis to dissect the dynamic effects of these global shocks on South Korea’s macroeconomic stability and policy direction. Our findings reveal that the Bank of Korea has adeptly navigated through turbulent economic conditions induced by external shocks through well-coordinated policy adaptations. These adaptations, which include both traditional and innovative monetary tools, have been crucial in stabilizing the financial environment and promoting economic growth. By detailing the tailored application of the Taylor rule within the Korean context and strategic foreign exchange interventions by the central bank, this study contributes significantly to the broader discourse on the efficacy of monetary policy in open economies and offers insights on integrating advanced analytical methods into economic policy analysis.
Keywords: adaptive monetary policies; global economic shocks; Bayesian estimation techniques; impulse response analysis; Bank of Korea adaptive monetary policies; global economic shocks; Bayesian estimation techniques; impulse response analysis; Bank of Korea

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MDPI and ACS Style

He, Y.; Teng, Z. Navigating Uncharted Waters: The Transformation of the Bank of Korea’s Monetary Policy in Response to Global Economic Uncertainty. Mathematics 2024, 12, 1657. https://doi.org/10.3390/math12111657

AMA Style

He Y, Teng Z. Navigating Uncharted Waters: The Transformation of the Bank of Korea’s Monetary Policy in Response to Global Economic Uncertainty. Mathematics. 2024; 12(11):1657. https://doi.org/10.3390/math12111657

Chicago/Turabian Style

He, Yugang, and Zhuoqi Teng. 2024. "Navigating Uncharted Waters: The Transformation of the Bank of Korea’s Monetary Policy in Response to Global Economic Uncertainty" Mathematics 12, no. 11: 1657. https://doi.org/10.3390/math12111657

APA Style

He, Y., & Teng, Z. (2024). Navigating Uncharted Waters: The Transformation of the Bank of Korea’s Monetary Policy in Response to Global Economic Uncertainty. Mathematics, 12(11), 1657. https://doi.org/10.3390/math12111657

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